I'd do the set back....but it's not that simple.
Assuming you want the barrel stampings to align like the came from the factory...you can't just choose an arbitrary number to set it back. At the very least, you'll need to go back at least the length of the neck...plus whatever else it takes to bring the stampings into 'time'. A qualified 'smith will determine from the T.P.I. of the tenon threads how much it needs to be set back to both clean up the damaged neck and 'time' the stampings.
Get it to a qualified 'smith that knows what he's doing and has a reamer that is correct.
Good shootin'. -Al
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