Plastic disks on some bits

This may seem like a silly question, but what are those plastic disks/cylinders I see on some CNC bit shafts? It looks to me like they are there to help in depth setting, as if the distance from end of bit to disk is the same so you don’t have to reset Z axis after a bit change.

They could be used for depth, but I don’t know that I’d trust it. Mostly they are there for quick identification.

On some CAM programs the bit can be entered into a database and stored. So if it is mounted flush and that tool is selected in the cam program, you do not have to re-zero your z axis. It makes tool changes quicker during your job. This process is also used with automatic tool changers or ATCs. It will not be relevant to X-Carvers.