I have done both. You will never manage to sand off all the old paint. I tried that with a cabinet once and I never got down to bare wood. But you can sand down enough where you will have a nice paintable surface (maybe, unless it has 8 or 9 coats of paint).
The last time I did this I used a gallon can of paint stripper. The NASTY stuff that you have to use outdoors and wear rubber gloves with. It worked like a charm. It stripped the cabinet great, and then I proceeded to use wood stain on it rather than paint it again (dings, dents, and little scratches don't really show up on stripped and stained plywood cabs, so it is a good choice of finish). I may have clearcoated it afterwards. I don't really recall now (and the machine is long sold). I certainly clearcoated SOMETHING around that time period, but I don't THINK it was that cabinet, because I am still on a can of clearcoat I have had for years. Must have been something else. Ok, I am rambling now.
Yes, you are right about your Buster Bros. There is no such thing as a dedicated Buster Bros machine. Capcom never really was into dedicated cabinets much, almost all their games were conversion only, and even their dedicated games were still available as kits, and the kits outsold the dedicated versions handily.
Post a picture and I will tell you what it is.
Also, if the machine still has sideart, then just paint around it. Resulting cabinet will be worth more than if you had ripped the sideart off.
Finally, if you have a set of NOS sideart to use, then you wouldn't believe how great sticker sideart looks on sanded and lightly stained plywood. I have no idea why more games didn't come like that.