On some lathes with power crossfeed there is a gear machined as part of the cross feed screw (eg Boxford, SouthBend) which may foul a retraction method. I have seen a retracting crossfeed for the generic far eastern 12″ design so the feed must allow that using a similar cam system to the topslide example above.
The SB & Boxford have a simple clamp for setting an infeed limit which can be applied to some other lathes. About 40 years ago ME published a design (GHT?) for a micrometer feed limit for the Myford just to the left of the slide which unfortunately does not translate to other lathe designs.
The advantage of making a retracting tool is that you avoid ‘messing’ with your lathe that might affect resale and can keep it if you change machine, or have more than one to use it on. I would suggest therefore that it is the first option until you are too set in your ways to up/down size your lathe.