Recessed area around plumbing pipes in gunite pool?

What's the purpose of recessing the gunite around the plumbing pipes. I've had one contractor tell me they fill this void with hydraulic cement and then put a bead of 3M 5200 sealant around the pipe. Another pool company applies epoxy around the pipe (see pict), and another one told me they just fill that void with the pool finish. What's the proper way?
 
The purpose is to achieve a water tight seal between the inside and the outside, without leaving any small voids along the side of the pipe that water could flow out of the pool through. There are many slightly different ways of doing that, all of which work.
 
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