Offsets on any CNC machine can be complicated, as there are a few different settings which define the maximum movement of the Z-axis at any given time:

1. Absolute Machine Coordinates
2. Tool Offsets
3. Workpiece Coordinate System (WCS)

1. Absolute Machine Coordinate

Defined by the limit switches, this defines the total build volume of the machine. You may also think of this as the absolute axis limits. For Z, which is the most critical here, the machine will not move below a certain point. On the H-Series, Zmin (Z=0) is defined where the probe contacts the print bed. This is slightly adjustable, by changing where the bed mount pins are clamped in the bed.

Tools are almost always longer than the probe, and the machine WILL allow crashes of the tools into the print bed, while still respecting the Z axis limit.

2. Tool Offsets

Every tool has an offset value which defines how its centerline (X-Y) and length (Z) differs from the probe's. Here, we are discussing length. Most tools will have a negative Z offset, which means their position relative to the probe is further down (-Z). For example, if the Probe is at Z=10mm, pulling up an FDM tool would put the nozzle at approximately Z=1mm (assuming no adjustment to account for the difference).

Now consider when the machine DOES make an adjustment for this tool (the tool offset is set to Z=-9mm.) Again, the Probe is at 10mm (which means the Absolute Machine Coordinate is also Z=10). Now the tool is brought up, and the machine moves it automatically to Z=10. But now the Absolute Machine Coordinate is Z=19. The nozzle is at the same height as the probe, but now it can move down by 19mm before the machine stops. This is why the machine will allow crashes (negative values).

Note: you can always toggle between Absolute Machine Coordinates and "WCS Positions" (which includes active tool offsets) by clicking the text at the left of "Machine Status" in the Web Controller:

3. Workpiece Coordinate System

A WCS simply defines a new and addressable coordinate system for the machine, while the machine still respects the Axis Limits. So far, everything we have done is based on a print bed, which represents the maximum build volume of the machine. This actually IS a WCS (G54), but one that should not ever be changed. The machine generally operates in G54, and flat-bed printing should be done in G54 (no additional code required - Simplify3D won't change WCS).

In many cases though, you will want to use some other build strategy (vise, rotary axis, etc.) In such a case, do not change the Absolute Machine Coordinates (axis limits) or G54, but rather set another WCS (G55, G56, G57, G58, G59.1, G59.2, or G59.3).

For example, if we place a 50mm tall block on the print bed and want to work on top of that, we will set a WCS (say, G55) to Z=50mm. (In practice, we would probe the top of the block and use that more-accurate value to set the offset). When we activate G55 from the Offsets page, we will find that at an Absolute Machine Coordinate of Z=50, the WCS Position is Z=0. Further, if we pull up the tool from before (Tool offset of Z=-9mm), we will find the Absolute Machine Coordinate is Z=59 when the tool is in contact with the top surface of the block and the WCS Position is Z=0.

Suggestion

Play with the offsets and toggle back and forth between Absolute Machine Coordinates and WCS Positions. Try different scenarios, try to predict what the Absolute Coordinates will be, then check yourself.