Now this is something I've never seen, hear of, or even imagined.
This thing probably works, after a fashion, but son of a bleach, what a touchy situation. Just think of the carnage if your drill pushes up in the collet and happens to pull out of the hole on one of your "pecks" with the RPM over 4k, or you forget to turn the spindle off before pulling out, OR the drill breaks!
I would assume your hole location & angle tolerance would need to be WIDE open. Pretty trick idea though. I guess if you can manually program your drill cycle in 2 axes, you could do it in 3 axes for a compound angle hole.