No experience of doing it but there should not really be a problem.
If using it as a Lathe you may be better using a lathe profile as the tool tables and wizards will then be appropriate for a lathe. The standard Turn screen will not have the Y Dro on it but you can easily load a mill screenset, the only thing you need to do is make sure it has a .lset file extension. If you use the mill screenset with the .set file extension Mach will open in Mill mode rather than Lathe.
To change a mill screenset to a lathe one is as simple as copy the chosen screenset to a different location, change the file extension to .lset then save it back to the Mach3 folder. Use the View menu then Load Screens to open the newly done screen, you will have to use the drop down list for file types and choose .lset from the list or you will not see your newly changed screen.
Hood