[neilw20]

It is a manual gadget called snap tap or something like that.
The label has long since worn off.
It works like this:
There is a tool holder that can slide away on another track.
The toolholder is held in position in the track by a spring loaded ball that reacts the cutting force.
The track is at 30 degrees on the topslide.
It is attached via a pin and a link to a sliding stop mounted on the bed near the tailstock.
As the tool is threading towards the face (really fast is OK too !) just when the tool gets to the face the link pulls the tool away from the job, in effect instantly stopping Z movement of the tool which then translates to a +X move parallel to the face of the job.
Now the tool is clear of the job the carriage moves back towards the tailstock and the link hits a spring stop and restores the tool back into the spring loaded ball position ready for the next cut.

When used on internal threads it is mounted at -30 degrees and retracts in a -X direction.

I am sure this could be adapted to CNC, but I think you can do it with a CNC now as long as the spindle speed is slow enough.

Naturally the tool must be such that it can go right up to the face.

You could always thread mill it instead.

Another way is to start at the face and cut the thread towards the tailstock running in reverse with the tool upside down.
This is how I do internal threads from a blind face.
Just use low enough RPM so that the Z axis can accelerate instantly to the required pitch.