no it shouldnt been moved downwards , you just center it in the aluminum piece and then you move the table slightly to the right and make an complete turn on the rotary table .
then move the table again and turn the rotary table one turn .
repeat until you got the right depth in the half mold you are working on .
do you mean 0,7 x caliber from center of mill axle to tip of the cutting hss bar , or ??
but it still doesnt make sence to me , if you set it 0,7 x cal diameter the smallest circular thing you can do with it is 1,4 cal diameter .
I dont understand why you are talking about an square fitting in the bore , when you start rotating that tool you still must have 0,5 cal from center to tool tip to make that size cavity .
the 0,7 meassurement maybe is the correct dimension from flat to flat in an square fitting to an circular hole , but its still the outer point of the tool that decide what radius you get . not the flats .
when you rotate that square thing 0,7 from flat to flat its still the opposite corners at bore diameter distance that cuts the cavity .
so I cant for my life understand how you are calculating , but ok my math skills aint that advanced .
but so far I have never managed to do an 1/4 inch hole with an 1/2 inch drill bit
as usual its just my opinion