Why does it matter when we choose to cut the cake at the reception?
Timing isn't usually the first thing that comes to mind when one thinks about the traditional cutting of the cake at a reception. For most of us it conjures up an image of a couple feeding cake to each other with their hands, and maybe, if they are feeling cheeky, smooshing it into their spouse's mouth (generally thought to be tacky, and also requiring makeup repair).
Cutting the cake does provide an unspoken signal to guests: namely, that it's okay to leave without being thought of as rude. In days past, the cake was cut at the very end of the reception, and for some guests it was the magic moment that meant they could leave what was usually a long evening. Today, as a courtesy (especially to elderly guests), the cake is cut early on during the reception so that guests are free to leave when they are ready. The cake is typically cut after dinner is over and before the dancing gets in full swing.
Cutting the cake earlier in the evening serves two other purposes, as well. A photographer who is paid, usually hourly, to catch this moment won't need to stay until the very end of the evening if the cake is cut after dinner. Also, it's better for the cake to be cut before the dancing gets under way, so that it won't break up the energy on the dance floor when guests pause to watch the event.