Good question.

Even 1-2mm can cause a leak.
Best is to observe the factory setup.
Take photos, feel the factory seal with your finger so you know EXACTLY where it should be.

I have made this mistake before in a Volvo axle seal, installed the seal 2mm deeper than factory: it leaked! I had to redo it.

Anyway, most bore hole has the following setup:
- Air ---> beveled edge (about 2mm) ---> straight edge.
The question is: the factory seal is how far from the beveled edge?
Most of the time, it is about 1-2mm and that is it.
This is why at factory they have a tool so all the seals sit at the same depth for consistency.

Below is a GENERIC anatomy of a seal setup...


---

Attached Images

 

__________________
1998 E39 528i 5sp MT
2006 E53 X5 3.0 6sp MT