Yes, the master has to return its full stroke, there is a port to let fluid equilise? in the system, that is how the fluid gets in when you easy bleed it etc, but if the master is a big lower, the port will be blocked. If you then drive the car, the brake fluid expands, and locks the brakes on.
I dont know what fliud by the way peopel recomend on here, but ATE Super 200 is very cheep, and is very good fluid, if it was twice the price it would still be cheep.