You could either do it in the tank or outside of the tank. If it were me I'd move the rock out of the tank so you could work with it easier. Use a flat blunt object to peel the zoas off the rock you'd like to cut from the mother colony then snip between the polyps..glue to a new plug and your done.
You most definitely need take precautions when fragging Zoanthids and any coral for that matter. Zoanthids can be especially dangerous because some contain palytoxin which is one of the most potent toxins known to man. You absolutely should wear eye protection but a full face shield would be better. Wear gloves you can work easily in that will protect you. And also cover any open wounds. If you already know this sorry but if you don't read about it before trying this so you fully understand the respect you should give to the zoas. I had to tear a Zoa from a power head once and it released toxin into the water. Not thinking I wiped the side of my face (thankfully not my eye) and my face swelled up and burned like crazy for the rest of the day.
I'm not trying to scare you out of doing this or be overly dramatic..people obviously frag zoas all the time but you don't want to hurt yourself or someone else by not using caution.
Didn't [snip] anything because I don't want to overlook responding to any of your advice...
I didn't know about the toxins, but it doesn't come as a surprise...protection for the animals themselves is important to something that moves at glacial speeds...
If I cut the colony in situ, am I risking the lives of my other fauna? I'd like to avoid taking the rock out...if possible.
I placed the frag where it is, specifically to get some polyps to migrate. It's been a notable success thus far, so I just want to cut the colony into two, then move the original frag into my 75g...
Colony is on top left of the LR; tank has 2 clowns, 1 Yellow Coris Wrasse, 1 (red) Flasher Wrasse, 1 Fire Goby, 1 Watchman Goby, 1 Pajama Cardinal, 2 Green Cromis. Also assorted corals, 1 huge (impossible to lure out) Brittle Star & over a dozen small brittle stars, 1 Cleaner Shrimp, 1 Peppermint Shrimp, 6 Hermits, 2 Black Foot Trochus, and 1 Emerald Crab.
Yeah, that's a lot...but we're keeping a close eye on the chemistry. Had what looks like a Nitrate/Nitrite spike & lost 2 Banded Trochus and 1 Cromis...everything else is fine; that's in another thread...
Ed: Not sure why the pic is sideways...sorry