Well, from what i can see it's just crap

My guess is that spindle orientation fails because it never reaches dead-band

It will reach a stop but that stop can be anywhere from -200 to +200 or so in PID tuning.
No amount of messing with values has much effect, in fact its worse since i change the bearings from grease to oil lube, its very low friction and at my previous setting with P=7000 its now started oscillating instead of stopping.
Increasing P above 9000 seems to cause increasingly violent oscillation until it faults out or i hit the red button.
Maybe these servos are just garbage for a spindle?
I have the same drives and motors on my other axes and they all work faultlessly, big difference is friction damping/load.
With the spindle oscillating a gentle touch with the hand will stop it but dead-band is still off.
Its just the generic china servo from AASD - very popular due to price.
I have tried before setting the spindle as an axis the auto-tuning but it fails to get any sensible numbers.