K3 controls power to the servo drives, the N/C contact on the XPS monitors the K3 unit, if it is jammed or fails to open, the XPS does not pull in and Mach will stay in reset as well as no spindle relay/contactor supply.

If K3 jams on despite pressing the E-stop or limits, it will not latch-in again.

It was a reasonable safety enhancement i think.

As with all systems, a catastrophic failure - in this case K3 welding shut on one or more lines will still leave a danger but the chances of a contact weld at these low currents is pretty rare i think?