This is a tool that was designed for a different purpose. Most of the references that describe there use talk about using them with a magnetic drill. So this would be more common in a large fabrication than in a gun shop.
Annular Cutter at work.
This tool sometimes called a Rotabroach® cutter, is one of those tools that somebody realized had a crossover use. Gun lovers have figured out that they can be used in the place of a lathe to reduce the diameter of the muzzle of a barrel. Normally a lathe would be used for this work, however not everyone can afford a lathe.
There might be some expedient times with such a tool would be more useful than a lathe. If you have ever had to train an employee you know that the easiest process with minimum opportunity for error is a good choice. I could see a production facility using the annular cutter because it’s hard to make a mistake.
Be sure to use cutting oil.
Piloting the tool makes it an easy tool to use. The cutting speed is best kept slow, so a hand drill will work just fine with this tool. Depending on the actual cutter they can cut as deep as 1 or 2 inches. Normally you do not want to cut that far back on the barrel, most brakes ask for a .500″ to .560″ length for the threaded portion. Simply mark how far you want to run the cutter back on the barrel.
These tools are aggressive and sharp so keep the rpm under 250, I find the best results at around 100 rpm. There is a lot of friction and the cutting area is fairly small for the diameter of the cutter, so they are easy to heat up. Plenty of cutting oil is to be used on the pilot, barrel and cutter. Because the pilots are long and extend a long distance into the barrel, helping align the tool. However, you still need to keep the tool aligned to the barrel or you can do damage to the tool, pilot, barrel, or all three. If the tool binds at all check your alignment, you may be pushing the tool to one side.
Stop several times during the process and clear away the chips and re-oil the cutter and pilot. Cleaning the pilot and making sure the bore is clear of chips will protect your crown and the bore alike. If the tool is “bites” and wants to stop you are probably running a little too slow, increase the rpm a little and slow the feed.
Muzzle of Nagant barrel after the annular cutter.
Once the new muzzle diameter is created you can install a gas block, or thread for a muzzle brake as you desire. There are several tools available for different diameters of muzzles and various pilots for calibers. Common calibers are .223. 5.45mm, 9mm and 30 Caliber.
4D Reamer Rentals LTD has added a variety of sizes of this tool and a bunch of dies and guides as well so you can use these on a variety of guns and calibers.
These tools are an ingenious repurpose of an existing tool. Therefore they do not cut a perfect diameter for the die, but they are a good expedient and anyone who understands how a die cuts will be able to make good use of this tool. Way cheaper than buying a lathe!
GunsmithTalk 
Is the pilot made of the same steel as the cutting bit? I’m a bit concerned this would mess up the rifling.
Pilots are replaceable and not of the same material as the cutter. As with all piloted tools it is necessary to run cutting oils and to know what you are doing. All chamber tools have pilots, most muzzle tools for crowning or squaring have pilots, this in not unusual at all.
Hope that helps.
Please don’t think I am being disrespectful, but why would anyone use a tool that would damage the bore? No, Pilots are separate so they can be changed for various calibers.
What size annuler cutter
https://4drentals.com/products/tool-rentals/crowning-tools/