For magnetics, I set the depth at 1m below the target's draft.
For impacts, I usually set depth at 1/2 the target's draft.
If the running depth is too deep, high sea states can cause the fish to miss under the hull.
I'm not sure how closely it is modelled in SHIII, but historically, high sea states could wreak havoc on torpedos set too deep or shallow.
Iirc, someone here once had a fish leap out of a wave and hit the target's superstructure.
