I have a HAAS TM-1, and I don't think there is any place for it to compensate for the diameter automatically. I always just subtract half the diameter in my work offsets manually - which is actually adding as all the offsets are negative. (i.e. a .2" diameter and X at -17.2342 would end up being -17.1342)
Maybe someone else here can show me a trick I did not know to compensate automatically.