*humpf*No don't do that. That portion remains uncut. Snake those connectors out of the bundle in the direction shown by the arrow. I found helpful removing pins (one at a time only) from certain connectors whenever wires get tangled. This way I eliminated unnecessary cutting and resoldering. Much easier just to remove and reinstall the pin.
Your harness does look a little different from mine. No I did not shorten or extended any wire bundles only few individual wires. I have 2002 WRX harness. Not sure which setup you have as I didn't see it in your build. But the logic should be the same.
1) Start at the ECU (circled in magenta color) and passenger side engine connectors (circled in orange). Move engine connectors to the left of ECU. This will become your outmost rear point.
2) Now snake all engine connectors for the driver's side and transmission connectors (circled in blue) and bring them toward ECU. You literally only need to cut and extend 2 or 3 wires to do that. Now you will have all engine connections in the same spot.
3) Move black fuse box in the direction shown by the arrow. No cutting should be required. This will become your outmost front point.
4) The rest of connectors (diagnostic, flash memory, etc) I've moved toward beige fuse box to be located under dash.
Even though the overall harness is longer then it needs to be, I've decided not to shorten it and just make few service loops where needed to ensure overall harness integrity remains unchanged.
In the end I've end up resoldering less then 10 wires. Most of those had to do with warning light elimination: ABS, Airbag and gauge cluster light (I've eliminated integrated module and had to ground one of the wires to maintain cluster backlight).
Hope this helps.