That’s quite smart.. certainly helps if you don’t have a motor with a brake and means you don’t have to hand brake the mill when you want to reverse - which is my biggest pet peeve and source of anxiety when power tapping (the motor spin down). Just lift up, let the motor spin down, reengage and reverse. Nice.so it keeps the tap centered in the chuck, if you stop the feed, it will pull itself out of the holder and disengage. The hole is drilled not all the way through, then a swipe is taken with an end mill to create the flats and expose the hole as a through hole. if you dont' feed at all, as soon as the tap moves enough to release from the flats, it stops turning. simple
or as Ray says pull back on the quill and it stops.