A good reference for refretting and nibs is Dan Erlewine – in fact I asked him about nibs myself over dinner at an ASIA Symposium.
My understanding is that Gibson creates the nibs by fretting a fingerboard before it is glued to the neck shaft, filing the edges flush with the FB, gluing up the fretted FB thus creating a ledge for the binding, installing overheight binding and scraping it down to leave the fret ends effectively capped in binding. I see many Gibsons with what I consider poor fingerboard prep. The process above can go wrong in a few ways – a slotted FB can curl towards the slots, a fretted unglued FB can backbow, uneven clamping pressure on a fretted unglued FB can put a footprint in the FB – and now the FB can’t be leveled as it is already fretted. Only the frets can be leveled. The FB is the foundation of the fretwork; if it is off there will be a compromise somewhere.
There are times I have saved original nibs during fret replacement – usually during partial refrets. I pride myself in near invisible partial refret work. During a partial refret with saved nibs, the frets in the concerned area are removed sans heat inside of the nibs and catalogued for exact radius and length, the FB is leveled inside the nibs using a small block, the new frets are trimmed using a disc sander to the exact length of the original frets and then installed.
In order to true up a fingerboard that is off significantly, the nibs are removed during the FB leveling, and if nibs are to be replaced the fretwire is ground to the exact length as the original wire and then nibs are rebuilt either out of tinted white cyanoacrylite glue (super glue) or binding material melted in acetone.
Some folks advocate removing and replacing the binding but I prefer not to disturb it if at all possible. Rebuilt nibs, replaced binding and refinished areas are visible under a black light. Even killer repairwork may be detectable to the educated.
If the binding is really thin, the fret size for replacement significantly higher or wider (ie fretless wonder to medium jumbo) or the FB requires significant leveling, removing the nibs becomes prudent. There are instances where the FB edge is not straight, particularly where the neck joint/access is blended on the treble side and it is more difficult to true up and smooth the edge without impacting more protruding areas in the binding line. Some FBs expand and contract differently over the body compared to on the neck shaft and this has an effect too. Sometimes in order to make everything appear as factory/stock (but correct), the FB edges are reprayed. Respraying the edges is one way (probably the best way) to finish in a nut as factory (nut blank is installed prior to finish). It’s all about working within the limitations of the piece and the wishes of the client.
Nibs and finish are primarily cosmetic (although they can have an impact on value) and should not affect playability (although some folks prefer fretting over the binding to have as much playable surface as possible). Most of my clients opt not to replace/save nibs and seem primarily concerned with playability issues. It’s your guitar – have it the way you want it. Dave Johnson of Historic Makeovers does excellent finishwork and is another good reference on this topic. Nibs are worth saving on a vintage piece and if there is enough left to save and the FB does not require significant leveling. Rarely have I been engaged to retain nibs on a recent manufacture guitar.
Nib saving/replacement adds time to the work and as such depending on the method employed (as dictated by the specific situation) can add between $100 to $250 (high side is full nib replacement and respray edges, can’t tell specific need until getting into the work) to the total.