TL;DR: yes you can top. Replant soon.
You can top whenever. I've topped after the 2nd set if leaves showed. Took a few days for the branches to come up, but yea, top whenever. Also yes I would transplant soon. Your leaves are over the pot edges and I would guess there's a nice healthy root ball in there now.
I kept a plant in a 2 inch pot for about 12 weeks after germination. It'll grow slow and skinny. She only reached about 9 inches and pretty much stayed that way. Bottom leaves would die and some small new growth would come. I dont recommend it. Eventually i couldnt keep up with watering and most died. I gotta stop rambling lol