I reviewed six shot peen specifications that our facility needs to comply to. Only one allows 10% of nominal arc height, the other five require 10% of the minimum arc height. I would say that it is safer to go with 10% of the MINIMUM arc height.
The specifications talk in terms of per surface, thus your stock removal would have to be from the actual post-peen size, not the pre-peen size. If the parts hole sizes are growing during peening, allowances will have to be made so that the final drawing size is met after peening and honing.
