IMO some amount of pulsation is normal. In my shop, sample of one of each, the pulsation is more noticeable on my conventional headstock than on a PowerPro. But both exhibited it. I'm sure there is also something called excessive pulsation, but I'm not sure how we would measure or define it.
Getting back to your original thought regarding quill spindle runout at the spline end... My PowerPro kit came with a Drive Sleeve Assembly with excessive runout. This is the same problem but with the opposite cause. I didn't notice it for quite a while, but the runout (wobble) is extremely noticeable if you mount a sanding disc on the upper auxiliary spindle and run at low speeds. This was documented here:(
https://forum.shopsmith.com/viewtopic.php?p=302299#p302299)
- David