Just thinking about some of the installs I've done and some of the lack of room issues I've faced in the past when converting locos from DC to DCC or RailPro. The LM3's state not to take off the cover from the module but, spoiler alert, I did take the cover off one. They're really not any different in size than a standard, old DCC decoder. If properly covered with Kapton tape (or other) to prevent shorting, any reason connected to its functionality that I shouldn't take covers off?
I've got three BB Athearn Locos with LM3's in them. They fit very tightly within the shell. Just taking off the outer plastic cover make a big difference.