Someone probably knows the exact answer and could tell you something like “the install depth should be 3x the shank diameter”. But for the sake of a quick answer…
The farther you can bury the shank into the collet the less the bit will flex when cutting, which is a good thing of course.
Any change in geometry on a bit (like a step or flute) is a stress concentration point, so you don’t want that transition in the collet or butted up against it, but you want to get close.
I tend to touch the flutes or step to the collet and pull it back out about 1/8 in.
We install ours so that they will reach the workpiece. With the Bosch 1200 router the face of the collet is quite high, and the sled is quite thick. Some of our bits are a bit (!) short, so they can’t have too much of the shaft clamped in the collet.
It really depends on the bit itself and the machine construction.
Also, take note of the physical range of your Z axis and make sure you have enough headroom to move the bit in and out to where you want it to be without exceeding the physical range of the Z axis leadscrew. I glued a pointer and a small scale to the router which does nothing except indicate where the router is in its range. That tells me if I am likely to exceed it (at either end).