Why is there an indentation or “cut” on the side of my brake rotors? Some brake rotors have what appears to be an indentation or piece of the rotor material removed from the edges, similar to the photo on the right. In any case, this "cut" on the side of the brake rotor is actually meant to reduce something known as rotating unbalance. People may ask the question above or even claim their brake rotor is irregular or damaged altogether. In actuality, this characteristic about the rotor does not mean there is anything wrong with the rotor, but that the part was balanced or mill balanced.
Rotating unbalance is the uneven distribution of weight around an axis of rotation. This uneven weight distribution may cause the center axis to pull or deviate from the geometric center. For example, if there is an uneven weight distribution on a brake rotor, this could cause it to spin less true or in an elliptical orbit, which may results in vibration, noise, more wear and damage--which leads to increased maintenance. So, material is either added or removed (in this case removed) from the rotor to reduce the imbalance to an acceptable standard.
To help further put this into idea into perspective, just think of tire balance. When a tire is imbalanced, there is an uneven distribution of mass which may cause the tire to wobble or hop, resulting in a ride disturbance. For tires, sometimes correction weights are applied to counteract an imbalance, and this could be the case for brake rotors as well with the use of clips. So, if your brake rotors have a slit like the picture above, no need to panic, your rotors were mill balanced so that it will spin truer.