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A "cutout", which is not something i've seen for a while actually, should not damage the LP in any way (I have yet to see one that has anyway).
It's a way for stores to sell back overstocks to the label I believe and the hole or cut corner insures it's not re-sold as truly "new." But it is new to you and me, except it should be significantly cheaper. Mostly I've seen a little straight cut up near the corner rather than the whole corner chopped off. I've seen that too- seems overkill and looks pretty ugly. CDs will get a little drill hole in the box which isn't so great either, but again often 25% or more off.
It sucks if the LP had great liner art or somehting, but when I was younder I was happy to save serious dough on a cutout version any day, as it just meant I could walk out with more music. Big record stores would often have a dedicated section of cutouts and demos (usually used by radio stations). Yer gettin' me all nostaligic now dude!
Hope that explained it for you.