I have noticed this problem for a while and haven't figured it out yet. My lathe tool is cutting past the stock, in thise case around .015" which I think is common in all cases. The extend distance is set to 0 for the retract. not sure what parameter would do this.
It's picking up on the radius of your insert, not an operation parameter. I made an operation with a normal .031R insert. Then copied both tool and tool path, changed only the radius on the insert, and now it doesn't cut past the end of the part.
I see, I guess there is no way to say stop at contact point? If not I might submit an enhancement request.
Have you tried in a later release?
NX 8 is no longer under development, so things might already be there in NX 9 or 10.
Production: NX10.0.3, VERICUT 8.0, FBM, MRL 3.1.4 | TcUA 10.1 MP7 Patch 0 (10.1.7.0) | TcVis 10.1
Development: VB.NET, Tcl/Tk Testing: NX11.0 EAP, NX12.0 EAP
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