There are two options. The easiest is to remove the binding, saw the slots, fret normally, and rebind the neck. The second involves modifying a saw blade so that the blade is narrower than the shortest fret slot length or purchasing a
specialty saw like one from Stewart-MacDonald. These saws are normally used to clean fret slots of glue and debris before a refret. The problem is that while trying to saw a straight line in the right location that it is easy to repeatedly bump the binding and dislodge it. It is even easier to slice through the binding while trying to start the blade in the slot because it is difficult to pay attention to both the treble and bass sides while trying to stay on line. And staying on line is critical. Fret placement is a game played in thousandths of an inch.
Unless it is a vintage instrument remove the binding.