If the lathe doesn't face EXACTLY square, (Many lathes face VERY slightly concave ) the out of flatness over 2.25 mm (radius of a 4.5 mm rod ) is barely going to be measureable with the kit that most hobbyists have.
So 0.0001" should be well within capability.
Within a measuring instrument containing all original parts, there will be a number of tolerances, on each component, albeit fine limit, which build up to depart from ABSOLUTE accuracy under controlled conditions.
We think of slip gauges, in good condition, as being accurate to a millionth of an inch. Stack up several slips, with the protective ones, and you can have a variation of several millionths of an inch from one box of "perfect" slips to another from the same manufacturer, even under the closely controlled conditions of temperature and humidity of a Calibration Room. .
In high volume production industry, a measuring device that is in error by 0.01 % of its operating range (SAY 0.002" in 18" ) will be condemned
And there will be very few hobbyists who work under Standards Room conditions, with measuring equipment that is calibrated on a regular basis.
Working consistently to less than 0.0001" is going to be difficult with hobby machines that are.either built down to a price or used and, therefore, worn.
In the hobby world, most of the time working to less than 0.0001" is going to stretch machine, measuring equipment and operator skill to their combined limits.
Being realistic, many of the parts in our car engines will have been made to a tolerance of 0.001". Not much requires closer than that, except some surface finishes, and fuel injection equipment which does require single micron accuracy.
Howard