OTOH, it is usually highly desirable to preserve the connector or other part with the terminal lug. Back in the day, the insulator was usually phenolic or other heat resistant plastic, but nowadays, all the cheaper end of the market uses injection moulded thermoplastics so you absolutely cannot afford the time at temperature required to unpick the looped wire without damage unless the part is already faulty, so is to be replaced anyway. Wire can be replaced or spliced fairly easily if enough slack cant be found, and most of us already have materials to do so handy, but sourcing and fitting a panel mount part is a PITA, especially when it is important to avoid marring the panel.
I therefore would favour cutting the wire right at the lug unless the part is faulty and the wire has little slack, which will make me cut the terminal off to free the wire from the hole so it can be desoldered without wire damage.