Some people have put Blow off valves on these KZ engines. However I wouldn't say you'd benefit much unless you're running very high boost (20+psi).
With regards to the butterfly, the two reasons it's there is to smooth shut down and stop a run away scenario. I can say the run away scenario has occurred to me and whilst the butterfly valve was closed so obviously it doesn't work too well on that. Thankfully I managed to block the intake off within a few seconds to shut it down... However, it does make we wonder how much more it would have revved it the butterfly was actually open.... (It was over 4K in revs and I heard some metal fly out the exhaust). This was due to turning up the spill control valve too much in my experimental days .
I just removed my butterfly valve and wish I did it sooner. I can feel the turbo spooling up so much earlier and throttle response and low down torque seems to have improved with standard fueling.
If you're going to remove it, grind off the tab on the back of the screw and you'll actually be able to unscrew it. I managed that on one side, but damaged the head on the other screw so had to drill it out. It is possible...