What would you call this cut out space in a panel?

Notch would be a reasonable everyday term, though it has many synonyms - cleft, cut, groove, indent etc.

However I believe the technical term in woodworking or masonry is a rebate (N. American rabbet)

The OED provides this as sense 1a of rebate as used in carpentry or masonry (clearly rebate has other meanings - including the obvious commercial one).

A recess or step cut along or into the edge of a piece of wood, stone, or other material and usually intended to form a joint with another piece or to receive a door, windowpane, etc.; = rabbet n. 1. In North America the more usual form is rabbet (see rabbet n. I.).

2004 Sunday Mail (S. Afr.) (Nexis) 19 Dec. h10 How to replace a small broken window... Remove old putty with a chisel and take out broken glass. Clean out rebate with a chisel to remove any remaining putty.

Under rabbet the following is given:

(a) A channel, groove, or slot, cut along the edge or face of a piece of wood or other material and intended to receive the edge or end of another piece or a tongue made specially to fit (now rare); (b) a rectangular recess made along a projecting angle or arris to form a step or shoulder. Cf. rebate n.2 Both forms are extensively used in joining or framing wood, the two pieces being commonly either in the same plane or at right angles to each other. In a double rabbet (in sense 1a(b)) the shoulder on one piece fits into the rabbet of the other. In Masonry, a rabbet (in sense 1a(b)) is often made to receive the edge of a door, window, etc.; in picture frames the rabbet receives the edges of the glass. (b). †(a) A tongue to fit into a groove (obsolete); (b) any one of the sides of a rabbet made in an arris; a shoulder, a ledge.