Having worked with 2, 2.5, 3, 4, 5-axis programming and machines since 1986 (back in the DOS days), CAD/CAM software has advanced beyond what we hoped for in the early days. I recall my first exposure was 7-spindle routers programming on a proprietary software package running on a PDP-11 using dual 8-inch floppy disks. We used graph paper and had to trig out every point, intersection, arc center, spline node, etc. and manually input the data, then create the G-code on a punch tape and load the punch tape into the routers.
Enter the DOS realm and we finally got computers to start doing a lot of that with a very early version of BobCAD, but we still had this limitation of Z-axis retracting for every cut.
Enter a different company with CADKey and MasterCAM, still under DOS, wireframe only, no surfaces, solids were still only in government labs. MasterCAM gave us the ability to control the Z-axis retraction from the software. But there were also ways to edit the post processor to keep the Z-axis from retracting fully, but usually we kept it 0.050" - 0.100" above the work piece.
We still had to advance a few more years before full control of the Z-axis retraction (plus helical entry, ramp entry) became the norm.
When I was heavy into all that, MasterCAM was still king, but SurfCAM, CATIA and others I used, all allowed full control of Z-axis retraction.
MasterCAM x11 was the last CAM program I used on a full-time basis, so I’m a bit rusty on where things have advanced, nor do I have the personal budget to keep a license of MasterCAM, even though I would LOVE to still have it available. I do keep a license of SolidWorks Professional up to date and have used it since 1994 for plastic injection mold design, vacuum and thermoform mold design and spent 8 years designing industrial and municipal water treatment plants. Now I just design things I want to build like kitchen and bath cabinets.
Most low-end CAM products will have limitations on features and sadly, Z-axis retraction seems to be one.