Home_offset defines the distance between the physical location of the homing sensor in relation to the physical end of the axis travel. Depending on the geometry of a given machine, it may not be possible or practical to locate the homing sensor proximate to the end of the axis. Remember, LCNC is endlessly configurable across any conceivable layout - and that leaves you lots of room to get into trouble too.
If a machine required the homing sensor +50mm from the intended zero point of that axis, the homing routine will find the sensor, call that point "50mm" and allow the axis to travel backward to zero, or whatever point you define with the Home variable - which is usually some arbitrary tiny distance from the hard end of travel, or a discrete limit switch (as opposed to shared home/limit switches).
For example, you configure your z axis to have its zero and a hard-stop limit switch at the extreme top of travel, but your homing switch is 20mm below that. You'd set home_offset = -20 and then set Home = -.01. You would get a warning if you tried to command the z axis to true zero, as that is now outside the soft limits of the machine and would trip your limit anyway.
I don't think it's common to have a huge distance for home offset, since having intended usable axis distance on the wrong side of your homing velocity direction might make things tricky if you started homing sequence inside the home offset distance - you'd never find your sensor. You'd just trip your limit and be stuck until you did an override jog to the happy side off your homing sensor and homed again.
For a common setup, the switches are shared home/limit, Home_offset = 0 and Home = [some tiny back-off distance] either in the positive or negative direction on your final axis, depending on whether you home from the min or max end of your axis (again, that endless configurability).
While fiddling around with this, I always rigged a temporary switch at the end of travel, tied to e-stop. This prevented many collisions due to 3am typos in my ini file. Forget a minus sign, and things go clunk-bing-crunch-pop very fast.