machining the correct size of cylinder bore

If the piston bore is 3.405 (as mentioned in piston spec on the video) and the cylinder clearance 0.0040 is these mean the cylinder bore should be machined to 3.409

The cylinder bore is normally machines to the nominal six with a small tolerance for removing a little metal if going oversize, under NO circumstances should the bore be less than nominal. For example, if the bore is "4.0000 inches", and there is a +0.0005" tolerance, that means it will be between 4.0000 and 4.0005" - no less and preferable no more.

Normally the piston is made to give the specified clearanc in the nominal, 4.0000"cylinder bore - ie , if the clearance is 0.003 to 0.0035, then the piston diameter will be 3.9965 to 3.9970".

However, sometimes there may be slightly more clearance required for, say, highly turbocharged engines, so a little more material will be removed from the cylinder(s) during honing to give the exact required clearance.

I suspect the actual piston size is for an 86.5mm bore, and converted to decimal inches, which may have introduced slight errors?