My understanding is you can cut anyway you like and glue the frags to rock. Any part of it can regrow a new toadstool. From Eric Borneman's book, "Aquarium Corals-Selection, Husbandry and Natural History",
"Sarcophytons are extremely "cuttable". All sections of the coral are totipotent, meaning that a slice of the colony attached by glue or banding to a substrate can reattach and form another complete colony fairly quickly."
Make sure you provide good water flow after fragging to keep the wounds clean. Also, they will take a week (or more) to attach to the new surface so be very patient.
the best way to frag a toad is cut the top off leave the stump it will rejuv. then take the cap and cut into pie peices. glue to plug. put in high flow add lugols iodine for healing. thanks fish