Why would lowering your test dosage create a better cutting environment for your body? It's true that test is going to make you retain more water (assuming you're not heavily dosing AIs), but in terms of fat loss, there is no reason why 650mg of test would make it difficult to lose weight and 500mg would be perfect. For a lot of people it's seemed that the heavier you go on anabolics the higher your basal metabolic rate is (always figured this might have something to do with the increased heart rate on-cycle, but I'm just speculating).
No reason to lower test. Seeing that the body naturally produces less test when in a caloric deficit, I would only guess that higher test dosages could only benefit you in cutting body fat. It's true that water retention can sometimes hide the results you're getting, but if you're that concerned about that, just up your AI dosage.