Pofo:
The reference signal (the Z channel) is for setting the "Machine Zero" on a CNC machine. After the referencing of the machine, you can jog the machine to any position within the physical limits of the machine and set your "Work Zero". For accurate work, this is where you would use an Edge Finder, or a digital probe, to set you X0.00, Y0.00, and Z0.00 for the job. For most users, this will be the G54 offset from Machine zero, and the DRO's will read 0.0000 in all axis that have been referenced when you set the Zero for that job. You can also set multiple "Work" offsets if you have several fixtures, G54, G55 ... etc, with programs appropriate for each given fixture. All these offsets become written into the Mach3 "Offsets Table."
If you are at the "Work Zero", by clicking on the "Machine Zero" button, you will see the actual distance in inch or millimeters your work zero for each axis is from the "Machine Zero" of that particular axis, after the machine has been "Referenced."
Many people do not bother with this procedure, and just move to where they want the Job zero to be and click Ref All. This works if there are no reference switches, and/or a machine does not have shaft encoders, such as a stepper motor machine. However, there are also "Hybird" stepper motor drives that utilize encoders.
The purpose of the encoder Z channel for machine referencing is to provide a repeatable, fixed, reference point that can be re-established after a machine/computer shutdown, as at the end of the day, and reset the Machine Zero the next time the CNC is started to the exact point it was before. Since the Encoder is fixed to the machine leadscrew, the Z channel is a known point in the machine travel which never changes. Thus, the job fixture you have on the machine can be used without needing to re-indicate the X,Y,Z positions since the "Work Zero (G54) has been established already, and is in the machine memory, and stored in the "Work Offsets" in the Mach3 program. When restarting the machine, you "Ref All", which Mach3 will automatically perform, and then the "Goto Zero" command will move to the exact point of your "Work Zero".
On a CNC machine with Encoders, there is a Reference Switch, and an Encoder Z channel. The Reference switch is located near a given axis physical limit, with a little space left. When you tell the machine "Ref X", or Ref All", the machine will move towards the particular reference switch until the switch is tripped. This micro-switch signal informs the system to reverse direction, and move at a slow speed until the Encoder Z channel is seen. Since the Z channel is a "Once per revolution signal" it is as accurate in repeatability as the resolution of the Encoder, or in your case, the Scale resolution. This Z channel is far finer resolution than the repeatability of any mechanical micro switch, which may be off a few thousands of an inch each time it is tripped, or even one or two thousands of an inch. The reference switch is necessary so the machine does not look for the Z channel until it is near the machine physical limit, and within one revolution of the leadscrew. This Machine Zero can usually be repeatably accurate to .0001 inch. The Z channel signal is ignored except when doing a "Reference" on that axis
The Z channel signal happens in such a brief space distance that it cannot be seen with a simple voltmeter. The machine electronics detects the signal because it is simply waiting for a digital transition from a 0 (no signal) to a digital 1 (voltage signal Hi), which can happen in milli-seconds. At this point the machine software automatically sets the Machine Zero.
Regarding your glass scales, I suggest you read the procedure the manufacturer wrote regarding machine referencing, which should be similar to a rotary encoder system.
This procedure is basic to all commercial CNC machines.
John