I think it may be difficult to see in that photo, but I removed it anyway. However, in my case, it still protrudes a little bit. But in the end, the back cover closed properly, so it's okay!Sweeeet!
Only thing you missed was taking off the 'side-clip-rail' for the two big RAM chips on the left hand side looking under the picofly.
It's what the RAM cover you cut away would have clipped onto (mind the tiny caps around it).
The picofly sits lower then.
Looking good however!
Ant