I use 3 miles when out at sea and far from shipping lanes. I reduce it when there's lots of traffic and false alarms. I turn if off when approaching port. Ships and tugs that I've talked to seem to be comfortable with 1/2 mile CPA; not me.
My Standard Horizon VHF/AIS does not filter alarms well. As seas rock my boat and rock the other vessel, the projected track, and thus CPA swings wildly and it may cross the alarm zone for a fraction of a second. That triggers a CPA alarm, then the alarm disappears before my finger can reach the button to silence the alarm. I've had this happen when the other vessel is as much as 35 miles away.
Then it alarms again with the next swell seconds later. Drives my crazy. I scramble to turn the alarm off, but new alarms coming while I'm navigating the menus cancel my actions. Sometimes it takes 10 or more attempts to successfully turn the alarm off.
They really need a filter on the alarms. If the CPA is inside the alarm zone for 60 seconds, trigger the alarm. If it leaves the alarm zone for 60 seconds, then cancel the alarm.