The nut needs to be removed, then reinstalled after the pawl mechanism has been installed.
Please be aware that the crankshaft threads on the magneto side are not very strong. It's terribly easy to strip the threads if you apply too much force, hence a good solution is to use Loctite 243 on the threads; then tighten the nut in place without excessive fastening torque.
If you strip the threads on the crankshaft, you will have to replace the crankshaft; meaning that the whole engine needs to come apart. Please be very careful when tightening up the nut on the magneto side of the crankshaft; especially when installing a pull-start.
If you f*&k this process up, it is the most costly f*&kup you can do on one of these engines, because a newbie is guaranteed to damage just about every part of the engine in the disassembly process; meaning that you will be better off buying a complete new engine; should you strip the threads on the magneto side of the crankshaft.
It is important to note that there is a small amount of play between the shaft and the internal diameter of the magnet bore. When removing the nut, it pays to make sure that the magnet to magneto coil arm air gap is correctly set. This is explained in the second web link.
This links might be of help. Give the web page load the photos:
http://motorizedbikeforum.the-talk.net/t198-pull-start-pullstart-pull-start-80cc-70cc-66cc-60cc-48cc
http://motorizedbikeforum.the-talk.net/t382-magneto-air-gap