Hi Rob,
Grounding is very complex and every situation is different, but normally I think it would be a bad idea to use a stand off on the KFLOP GND Lug to connect KFLOP GND to the frame (Earth GND). The frame of the machine can be very noisy and may even have voltage spikes large enough to damage KFLOP. This may also form ground loop where Earth GND currents that would be expected to flow through the frame to Earth now follow a alternate path into KFLOP through the USB Cable, through
the PC, then to Earth GND.
The KFLOP GND Lug can be useful for multiple DC GNDs going to relatively quiet/clean devices like encoders, step/dir drives, MPGs, etc...
HTH
Regards
TK