I'm just finishing 4 rag quilts (my 1st Quilting venture). The 1st I cut the batting the same size (10") as the front (layer cake cotton) and back (flannel, ragged this side). My reasoning was that a 10" block had a lot of open space with just the "X" stitching. What I found was that it did made 'heavy' stitching even for a walking foot, especially in the final joining. Therefore I did the other 3 with the batting cut 9" to keep out of the seams; I found like you that here and there the batting was caught up in the seam.

As to the 'ragging effect' - I think it's fine with or without the batting showing. My 1st quilt with the batting fully showing is just heavier ragging than without it showing - both look very nice! I wouldn't recut the batting since it may shift again when you sew and be caught up in the seam - and it's going to be fine anyway. JMO. You'll love the rag quilt!!