This is a very good question in a way - how do I know if I'm overloading my lathe? In the old days, the idea was that a lathe should work as hard as it could; push it until it groans and then back off a tad. On your lathe, a 0.125" cut in 12L14 isn't even approaching the groaning stage (I know which lathe you own); in fact, with the right tool you could double that cut and still be okay with this material. But for guys with smaller lathes, how do you tell when you're pushing it?
I don't know what other guys do. I'm of the mindset that you should listen to and feel your lathe as it cuts; this tells me how happy or unhappy the lathe is as it cuts. On a heavy cut, my motor doesn't slow down and my hand on the compound only feels the cutter engage in the cut; after that, there is no more movement under my hand. I hear a hissing as the tool cuts and the finish of the cut is appropriate for the material. The lathe is loaded but it is handling the load and is cutting as it should. My 11" Emco with a good HSS tool will take a 0.250" cut in 12L14 without complaint and my little Sherline will take a 0.050" cut in 12L14 without even slowing down.
When I get too ambitious, the lathe will tell me. The motor slows, and I can feel the compound rise as the power feed tries to push the carriage through the cut. I hear the tone of the cut change; it now sounds raspy and rough, with a lower pitch. The finish gets coarse and my lathe just feels and sounds like its laboring. It may not chatter but its getting close to it. If you know your lathe, you'll see/hear/feel this within a few seconds of engaging the cut.
The only way to know how your lathe reacts to a cut that is too big for it is to push it until you reach it. Trust me; you'll know it when you get there.
I also happen to agree with Ken - the tools you use make a big difference in how aggressive you can get with a cut. If I need to maximize my depth of cut, I reach for a HSS tool ground to reduce cutting forces in the material I'm working with and I reduce my lead angle to keep those forces as low as I can. I'm sure others have their preferences and approaches.