The issue of a thin wall isnt really overheating by the gauge. When they are thin they can overheat, but generally its just localized to one area and doesnt do much on the gauge
What it can do is split or erode the cylinder where that water is superheated
More likely than that, on a thin cyl, is that the bore that doesnt keep shape as it gets thinner. An unstable bore isnt good for making power.
With that being said, I think .125 should be fine, it is my minimum, but I always go for the minimum overbore on a street motor for long term ring wear and as strong of a bore as I can. SO I try not to approach it if there is a way out
BTW if you go Diamond pistons you could go with any size you want, including .035, .037, .039 etc. Doug Garifo from POP can easily get those and they arent really that much more money than the common sizes. I ended up going .047 on my center oiler for just that reason.
I am with Undy, minimum bore change is best, and if you want more cubes go with the stroker, the rod/stroke ratio is almost identical with the 4.125 arm, so you will get the benefit of more cubes without the side loading (you can even go 4.25 arm it reduces the rod ratio a little, but it also gives a few more cubes for no added cost) and you can stay with a good solid bore.
Again I am not afraid of .125, but boring it less than that also leaves one more rebuild if things get ugly
