I have successfully blocked blocks that measured 12 1/4 as opposed to 12 1/2. It will keep the shape and size once dry and once in the quilt, as long as it is stableized sufficently with quilting it should be fine. You may chop a point once assembled but it won't be noticable unless in a show and being judged and then only the judge or other quilters may or may not notice. However, I am wondering why you chose to Paper piece this block? It is made up of HST which can easily be made without PP. I usually reserve PP for odd angles like Mariner's Compass or NYB blocks where the points end up very narrow and need to be pointy for the full effect of the pattern.