I took a rifle to have a brake installed and I was shocked to see how much it was turned down in order to thread it. The muzzle diameter prebrake was .670in and was turned down to .498(1/2") Is this normal or excessive on a 300Mag?

you mean 1/2" and yes it's normal on smaller calibers. .625" is normal for anything .30 cal to say .416

post amended for caliber

It's not unsafe if that's what you are asking.
I did a Savage 110 for a customer in .300 Win mag. The KDF break we used was advertised as being built for a .300 Win Mag It was 1/2"-28. It is quite small in my opinion.

I was thinking 5/8-18 would be more appropriate. I guess I could measure the threads with wires and determine the fit class, but it is a very well known muzzle brake mfg and was done in their shop, not just a gunsmith shop.

The muzzle breaks in 5/8" are 24 TPI.
and Thats where you need to remember about the 1/2 threads They are not 1/2"-20 they are 28 so thread depth is only .030" or so. 24 TPI is .036" thread depth. So you are not losing as much barrel as you think.

Thanks!