I'm not a CNC machine operator, but I have written a lot of code for motion control systems. Typically, the machine can protect itself in that it knows where the limits are and how not to exceed them.

The problem usually comes up by crashing into something that is inside its known workspace. e.g., cutting into a vise instead of the object that's held in the vise, or an incorrect offset causing a crash into the table. The machine may know that it can only travel up or down by 12.500 inches, but it has to hold cutting tools that may be of unknown length and that can cause it to hit things (like its own table).