I’m not sure that there is a hard-and-fast rule for this sort of thing. My enclosure is high enough that “the amount of the thing sticking out the top” is not an issue, so my general goal was to get the spinny part as close to the mount as was reasonable. To that end, I chucked up the bit I had with the minimum cut depth, with what I considered to be a reasonable stick-out, and bottomed that on my wasteboard (with the spindle loose in the mount). Then locked it down and called it good - which it has been, so far.
As far as height goes, the HDZ gives you plenty of range, but keep in mind that we are limited by the gantry height in any case. No sense in hoisting the spindle way up.