I haven't welded gears, but back in the 80's I repaired a few gearboxes which had rounded off dogs by grinding a slight undercut on to them. I can't remember any real problems with them after the gears were undercut. I can't remember how many degrees of undercut I put on the dogs, but if you undercut them to far you can have trouble with them not wanting to disenage easily, which can result in the action of the gear slectors feeling a bit stiff, especially if you are trying to do quick shifts without the clutch.
To grind the dogs, I made a jig which allowed me to mount the gears into a chainswaw chain sharpening grinder. This allowed me to set the depth, and angle of grinding in two planes. You have to be quite accurate and a fair degree of care needs to be taken when undercutting the dogs to make sure that all the dogs on a particular gear end up the same size and shape and that the match up accurately with the dog on the gear that they engage with. If the job isn't done correctly, you will end up with the distinct possibility of just just one dog taking all of the load. You can then end up with the overloaded dog braking off of the gear and if you are unluck jamming the gears and trashing the entire gear set.
CJ
