For the trim routers Makita/C3d and Dewalt the router bit needs to be seated only as far in as the length of the collet. So if your collet is .75 inches long then insert the router bit .75 inches. This gives the collet the best grasp of the bit. You can certainly insert the bit further in but never all the way . The top of the router shaft is not always smooth from machining and can cause vibration and excessive run out. The trim routers are not precision instruments and there is always some run out from the bearings. If the collet is not perfectly machines you also get some runout and if the router bit is inserted too far in that all can cause excessive runout.
The collet in the Makita/C3D and Dewalt all are designed to slide up an inclined plane in the router shaft. So the bit moves up slightly during tightening. The Makita and C3d routers collet and collet nut are not connected and when you loosen the spring action of the collet forces the collet and bit back down the inclined plane loosening the grip on the router bit. The Dewalt has the collet nut attached to the collet so when loosening the collet nut there is an initial loosening of the nut and continued moving the collet nut drags the collet and bit down the inclined plane. On Makita and C3d router collets sometimes the bit does not always get pushed down. If this happens give a few taps on the loosened collet nut and the vibration usually assists the spring action of the collet to come down and loosen the grip on the bit. Do not bang on the collet nut but just tap it and be careful not to hit the threads.
The ER type collets have multiple slots cut and so when you tighten up the collet nut it squeezes the collet to hold the router bit. With the multiple slots you get a more even pressure all the way around the bit. On the Makita/C3D and Dewalt you only have two slots making 4 gripping surfaces. So the ER type collets have an advantage of equalizing the pressure on the bit and theoretically make a more true running bit.
The factory collets are make to standards that work fine for a trim router doing trim work. For our CNC machines not so much. C3D makes and sells precision collets for the Makita/C3d routers and elairecorp.com makes precision collets for the Dewalts. However they are still just two slots with four gripping points on the bit.
C3D is making thier router with the ER style collet. There are a lot of cheap ER style collets or you can spend more for more precision made collets.
So it really depends on the luck of the draw if you got a router with a collet that runs true or if you got the router/collet combination that was at the extreme limits of tolerances.
Most of the trim routers only have two internal bearings while most of the spindles have 4 or more bearings that make them run truer.
So the combined tolerances of each piece of the trim router leads to more runout over a full fledged spindle.
The hardest cut for a router bit on a cnc can make is a full width cut of the router bit. If you are using a 1/4" bit to cutout your project even though it is making a small doc it is quite hard on the whole system to make a 1/4 inch cut.