Will, the Mach3 Mill manual has a good discussion of how to wire the homes and limits and of how Mach3 treats them. You have a lot of good choices.
Let's start with Limits. It's ok to wire them all together, because a limit is a limit and you just want the machine to stop if any limit is hit.
This is not true of a Home switch. Home is all about the machine finding it's reference coordinates in a highly accurate and repeatable way. You walk up to the machine, boot it up, and "Ref" the axes. Now Mach3 knows exactly where it is on the DRO.
Let's say you crash, have a power failure, or otherwise cause your machine to get "lost". Your part is still in the vise and you want to continue. Without home switches, the best you can do is use an edgefinder or similar tool to find a known location on the part. With Home switches, you REF the axes and the machine knows where it is again.
So what happens if we wire all the Home switches together? Well, it means we have to REF each axis independently, because if we move them all at once, we have no idea which one triggered the Home. This is perfectly ok, but it just means REF'ing requires 3 operations if you wire things up that way. If you provide Mach with 3 inputs, one per axis, you can use a "RefAll" function and one touch of a button will reference all three axes automagically.
That's pretty cool!
OK, now here is another thing to note about my Home switches. They are combined Home/Limit, and that is why those particular diodes are shown that way. I've not yet decided which configuration I want, and I may even leave out the diode approach so I can do simultaneous Home. In that case, each of my axes has 2 switches. One is a limit for one end, and one is a combined home/limit for the other end.
Lots to think about. Grab the Mach3 reference and ponder it. Let us know if you have more questions.
Best,
BW
Try G-Wizard Machinist's Calculator for free:
http://www.cnccookbook.com/CCGWizard.html