Hi
I have only retrofitted a couple of lathes with vfd but in both cases, I discarded the entire electrical protection and control system.
I kept the control switches (door micro-switches, operating switches etc) but all the fuses, relays, circuit breakers went in the bin.
I also replace the 3 phase 415VAC 7kW motor with a 3phase 240VAC 4kW motor. I used a 3.8kW Yaskawa V1000 vfd. This is the most powerful industrial quality drive I could find that can run off 1ph 220VAC.
I converted all controls from 110AC to 24VDC.
I fitted a RCBO to the switchboard.
I replaced the fuses with a combination of MCB and ultra-fast fuses in accordance with the manufactures recommendations.
I fitted a EMI filter to the input of the vfd. Schaffner makes a version specifically for the V1000.
I converted all indicator lamps to 24V LED.
I found that it was easier to rip out and replace the entire electrical system. The only thing I kept was the switch that controls fwd/stop/rev on the saddle.
This is the original electrical control/protection.
This is the vfd version.
My lathe is LinuxCNC ready in that it is now compatible with a CNC retrofit.
To answer your question.
The vfd needs to be connected directly to the spindle motor, and nothing else.
Each servo motor needs its own driver. If the servo motors run 400VAC, you may need to replace them.
You should avoid using relays if you can.