There is no need to remove all the putty. There needs to be about 3/16" to 1/4" of the vertical inner gutter lip clear to get a good grab. In fact, if too much putty is removed then the horizontal face of the Z clamping piece that presses down will be over angled.
Re: gutter putty and water intrusion - Use a good polyurethane caulk to seal any voids. Or touch up paint.
I just addressed the gutters on Beastie as we changed our medium CCV pop top out for a high CCV pop top. I dug put the old putty anywhere it had detached/ shrunk from the roof/gutter metal. It was surprising to see how far the moisture and surface rust had migrated below the putty. I used rust dissolver and sanding to address the rust. I filled the worst sections with JB Weld 2 part Plastic Filler. Then followed 86scotty's Loctite Marine PL caulking. The final layer was Raptor Color matched using the bottom edge of the gutter lip as the cut line.
Here are some pics of a gutter where I have removed a bit of putty. Thd first pic is Beastie prep for Raptor. The last pic is of a gutter that required very, very slight clearing of putty. The middle two were a gutter requiring more clearing.