Rex B writes:

He's only drilling through the side of a model locomotive wheel as I
recall. What, 1/4" travel? The $29 Enco looks to have a couple
inches "for cutting splines".

The spindle does have a few inches of extra length, but it doesn't appear
to permit controlled axial motion. When you loosen the setscrew collar to
let the spindle travel axially, you have nothing holding the rotational
position. Attaching to the carriage bed would seem to be simplest method;
you'd also have the carriage wheel to control feed rate and pressure,
instead of just shoving it with your hand.