Servo drive config and first movement

also what should be set to MAX_OUTPUT? is it 1to1 voltage so if my servo rated for 220v should i put there 220 or there is a formula for this?

"Changing PID doesn't change much only motor starts to heat"

So the motor starts to heat but you see no movement..
Sorry for this stupid question but is there a brake on the motor?
Can you turn the shaft by hand?

there is some movement but really minor, there is no brake, and yes  i can turn it by hand

Also have noticed that before failing i'm able to move it a bit, it looks like this;
I can tap on jog + and on halscope ferror is returning to zero after some movement and shaft is also has some rotation. I can do it 4 times and than ferror doesn't return to zero as fast as before, but really slowly and than driver trips into an error with high sound noice. After re-enabling it again if i tap again on + if fails immediately, but it can be moved in opposite direction again 4 times without an error. 

From your explanation, VFD is not set properly or something is wrong with it, but first check if all 3 wires from VFD to motor are connected properly.
In general, never try to run a VFD/spindle form software before making sure it is working properly on its own, not wired to any control. Use the buttons on the VFD, read the manual, set the setting as needed, and only after this working properly you can wire it to controls and continue tuning.
Spindle not spinning and heating is for sure one phase missing or a dead VFD or spindle motor fried.

all wires connected properly.

I would be happy to use Rtelligent manual but it is for old version 3.1 i have 4.0 and they are different. So i cannot be sure that P1.22 is really what is described in manual because default value is different in real life. some fields some what match others just empty.

I'm pretty much sure it will run from driver itself (will try this tomorrow). And it is for sure some configuration missing, PID or maybe some thresholds. But i just don't know what exactly or from what to start. Partially because of user manual says this value should be 400 but in such place that is 0, and i don't know is it just value or different parameter that i look at.

Any error codes visible on the drive?

yep, usually it is `motor stall fault`

What error code (AL.???) does that correspond to?

AL.247

You're up against a challenge not having the proper documentation..
I've only been able to find "RSE Series Servo System User Manual V3.1.pdf" and it does not cover AL.247

Are you able to confirm the basic motor parameters settings?
Like: Number of poles, voltage, continuous and stall current, resistance, inductance, rated and max torque..
Some drives are able to auto configure these parameters, perhaps your is.
Will be very interesting to see if you're able to run from driver itself, keep us posted.