Our NX CAM guru Matt Reynolds recently provided support to a customer with a drilling error that they were facing. Matt found the issue, identified the problem, and came to a resolution. See the answer here.

QUESTION:
I am trying to mill these threads shown below with an insert thread tool that has .166 flute length 1 1/8-12 UNF -2B THREAD USING HOLE MAKING  IN NX11

ANSWER:
You can get around this one by overwriting the Tap Drill Size to be smaller than the major diameter. The settings shown below would cut a thread in empty space (1.073 tap drill size is larger than the major and minor diameter, thus the alarm). You can manually overwrite the tap drill size to keep the modification within the threadmilling operation instead of remodeling the hole at a different diameter, which is what Kaelon was considering.  If you overwrite enough things, the Thread Standard and Size specifications don’t have any major effect on toolpath output as long as Major Diameter, Minor Diameter, Pitch, and Length are the same.

Modifying Tap Drill Size might cause unexpected radial stepovers due to describing a different amount of stock material, and the tap drill size must be bigger than the diameter of the threadmill.

In your example, you can change the tap drill size to .8 or 1.053 and can get the same exact posted code depending on how radial passes are set up.