Preferably I cut my Hygrophilea just below the nodes where there are roots coming out of the stem - makes them easier to re-plant as well. Due to my low light- and CO2 levels (I suppose) in my low tech tanks, mine are loosing their leaves at the bottom when they get to a certain size. So every couple of months, I basically just trim them down to avoid the long "ghostly" (as my wife calls them) defoliated stems - and to a lesser extent for the purpose of propagation. There is a limit to how many times that will work as pointed out.
I cut just above the nodes so that the stem staying in place ends at the node.
Before planting the removed top section, I trim it to just below a node (from which it will root) and cut off any leaves that would be under the substrate when it's planted. So, at least the leaves growing from the node which is now at the bottom of the cutting.