"Touch sensor" on my Xenetechs is called "Proximity sensor"
It works as Kev described. In fully auto mode 'Y" axis moves downward till nosecone hits material and initiates Proxy sensor to stop downward motion.
In software you have option to set additional steps usually 3 to 15 step for cutter to penetrate material trough the cap of the plastic.
Yes proxy sensor does have its function and should be installed if machine is equipped with one.
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