Funny you should as this Phil. Me and Lee (who you met at thrybergh last week) were talking about it on Friday after I released a fish by cutting the leader after it had swallowed the fly. I'm sure there will be different opinions on this topic but I've no problem cutting fish free unless fishing strictly catch and kill or the fish is obviously damaged and unlikely to survive.
We could both remember catching fish in the past that had a length of leader material hanging out of the vent and upon opening the fish up, the remains of the fly still inside the fish. There wasn't any of the hook just the dressing so obviously the hook had rusted away. My opinion is that this is what will usually happen if the hook doesn't fall out by it's own accord.
As I say, I think there will be lots of opinions on this one
Mat