Couple of thoughts for anyone reading, I’m not exactly sure what speeds and feeds were running, the vacuum certainly didn’t help but I don’t think it’s all about the vacuum.
1.) I’ve had success across the board using 1/8" compression bit end mills meant for CNC and doing a pocketing path with a ramp, compared to a drilling path. Primarily for a heat dissipation standpoint and also to help get chips out of the pocket. Something like 1/4" of thickness per pass at ~110 ipm feed rate, and 25-35 ipm for the fall down speed, 18000 on the spindle. I cut 1/2" x 1/2" pockets all the time like this in Baltic birch which isnt as small as the 5mm hole, but using a bit smaller than the final hole helps chips get out instead of getting packed into the spoilboard and heated up by the drilling motion. The vacuum then only makes this worse by encouraging oxygen to flow there and thus there’s a greater chance of a fire. I think this still could have happened without the vacuum on though using a drilling path depending on speeds.
I think why drill bits work fine on a normal drill press is because the press table has a hole in it that allows the drill bit to pass through once it cuts through your piece… The chips in a traditional drill press wind up on top of your piece or on the floor, but for a CNC since theres a spoilboard and there’s no place for the chips to go at the bottom, effectively creating compressing the chips into the spoilboard turning them into an ember. It’s like the “bow and drill” method for starting a fire in the wilderness- same idea and the vacuum just further fuels the ember.
2.) In general if speeds are way too low, or there is an excessive number of passes, any toolpath drilling or not runs the risk of creating a fire because of the heat that gets generated… Especially for tight pocket cuts in a concentrated area. It’s possible your drilling path could’ve worked but you couldve just been letting the drill bit idle a bit too long at the bottom, or too many passes? If you’re burning up your bits quickly and leaving burn marks on your material it’s always a good indicator that you could be running something too slow.
3.) Always check that there aren’t any scale factors applied to the controller, because sometimes there are depending who used it last, and it’s possible that you won’t actually get your feeds and speeds in your G-code. Before you hit run it’s worth double checking that speed scale is set to 1.0 etc. sometimes running a bit too slow can cause more damage than running it faster etc.