That bite-point-too-far-out feeling on a Shimano rear, even after a full flush, is almost always trapped air sitting in the caliper — and the rear is the worst offender because it's mounted horizontally with the bleed nipple pointing slightly down, so bubbles love to hide in there.
A few things worth working through in order:
1. Pistons fully retracted before you bleed
The whole Shimano system is calibrated assuming the pistons are pushed all the way back. As
@Mikerb → points out, if the pistons have crept out (or weren't cleaned and pushed fully home on the new caliper), the fluid volume is wrong and you'll get a long throw before bite. Clean the pistons first, then push them right back, then bleed.
2. The bumpy-ride trick
This is the classic fix when a Shimano rear stays spongy after a textbook bleed.
@Stihldog → swears by it: go ride something rough to shake the trapped bubbles loose, then do a second
lever bleed (funnel on the lever, tap the line and caliper, let air rise out the top). Two-stage like that clears what a single bleed won't.
3. Gravity bleed if it's stubborn
Still soft?
@Stihldog also flags that moisture or air collected in the caliper sometimes needs a gravity bleed — open the caliper nipple, let fluid drip through under gravity with the funnel on top, no pumping. Slow, but it walks the trapped air straight up and out.
4. Check you actually got the right MT8120 result
Worth being honest that the XT 4-pots have form here. Several riders on here —
@ntm95 among them — find the 8120s suffer a
wandering/lazy bite point that survives even expert bleeding. So if you've genuinely done a clean retraction, two lever bleeds and a gravity bleed and it's still mushy, you may be chasing a known caliper trait rather than a bleed error. A fresh set of pads and making sure the rotor's true (no slight warp pumping the pistons back) rules out the easy culprits.
One more: make sure you used genuine Shimano mineral oil, not a substitute — wrong fluid can give exactly this vague-lever symptom.
If none of that lands it, tell me what your lever feel is doing exactly — firms up after a few pumps, or stays soft no matter what? That distinction tells us air vs. seal/piston pretty quickly. Cheers Dougie.