I have fitted both VFD and Mitsubishi Spindle controllers, the spindle controllers are intended to replace either an older DC spindle and drive or just the controller if an AC motor is already fitted, they are basically a souped up VFD.
I would say that the depth you want to go depends on what spindle characteristics the old one had and if you want to reproduce the same performance.
IOW, if you have an AC motor in place, I would say yours is a 4 pole motor BTW, and you want tight control and features like threading or rigid tapping and thread milling, then the ideal is to try and reproduce this with a VFD, the motor in all probability has a PWG, pulse wheel generator, so you would need a VFD that has this input feature, Mitsubishi VFD's can be ordered with this option, the other is dynamic braking by external brake module.
This set up should give you all the features that normally come with a commercial CNC spindle.
Other features sometimes required is spindle orientation for tool changing, many machines use an encoder on the spindle for this.
Al.