Leave the leader hanging out of it's mouth and about 1/2 it's body length. The tag end will cause less inflamation "outside" the fish.

Also, food can push the shorter tag end towards the poop shoot. When that happens(or there is no leader at all) the hook can twist around and is facing the wrong way... ouch.

Now, if you leave the leader long the hook stays in position to be dislodged by the normal passing of food. A small barbless hook won't even have time to rust.

Source: This is Your Brain on Fish 2002