Zradix, the tips are usually 'ground' off. I do mine with a belt sander held in my bench vice... with the opposite limb tip against my instep on the floor. After grinding, I also go over the gluing surfaces with the toothing plane blade so that I can't possibly starve the joint of glue. I prep the horn the same way, then I use Smooth On epoxy, which has gap-filling properties. I have NEVER had one come loose the tiniest little bit, and I've used this technique with bows in excess of 70 lbs.
Horn is more durable than bamboo. Without overlays, the bottom limb tip can get worn, finish can come off allowing moisture in, etc. Also, with no overlay, you woultn't want to file the string grooves down into the bamboo at all, which would compromise its strength... not so with the horn. Also, cutting the string grooves down into the horn helps protect the string. IMO, The horn tips also give the bow a more 'finished', more attractive look.