Update: I dremelled a similar slot to the new design from VB on my "gen 2" C-Ring and I believe it worked! I just built up a CX-002 with the full internal handlebars and after road ride and a 40 mile gravel/rough-road/dirt-road ride, I think it's safe to say there is no headset play or rattles. There is a slight creak when I stand on it and mash the pedals, but I think I just need to retighten the headset bolt (things may have settled) and put some carbon paste on the steerer tube. I'll report back if this fixes the minor issue.
Additional notes:
I DIY spray painted my bike and did not mask off the headset bearing area, so there's a little build up of paint there, which takes up some of the gap around the bearing. I think some loctite 638 retaining compound may help if your frame is not painted there and has gaps. Or tape, per Pat's suggestion.