For 9, 12, 18, 24, 36 48, and 72 tpi you can only use the number 1.
for 9.5, 11.5, 13.5 tpi you can use 1 or 7
All other threads you can use 1, 4, 7, or 10.
1,4,7,10 correspond to carriage movements of one inch. Since 9,12,18,24,36,72 tpi threads (and all other integer tpi threads) repeat every inch, I see no reason why they advise you to use only 1. Furthermore, 12 tpi corresponds to the pitch of the leadscrew. When cutting a thread with the same pitch as the leadscrew, you can engage the halfnuts anywhere.
[Aside: You can verify this by cutting a "scratch" 18 tpi thread, engaging at, succesively, 1,4,7,10. The thread should track on all four engagement points.]
The half threads (9.5, 11.5, 13.5) repeat every two inches so the advice to use 1 or 7 (carriage movement of 2") seems correct.
Like Lew, I still don't see why they have twelve marks. Since one revolution of the dial is four inches, I can see no reason to not just have the traditional eight subdivisions, used as indicated in my writeup. What is gained by having the extra marks?
Idle speculation here... The Chinese reverse engineers saw that there were 8 marks on the dial on a 8 tpi leadscrew lathe so they figured that a 12 tpi leadscrew needed 12 marks.