Traditional mortise and tenons, like most wood joinery are cut with saw and chisels (possibly with a suitable plane as well) and have sharp linear features which are not easily replicated on a CNC with a round endmill.
One technique would be to cut the mortise with the part flat on the wasteboard, and the tenon held at a 90 degree angle in a vertical fixture, rounding it to match the radius of the pocket used to cut the mortise. See the chapter on Fingerjoints for a fixture and the mechanics of doing thus.
An alternative which could be cut in a single setup would be to cut the tenon in two halves each laid flat on the wasteboard and rounding them using a cove radius endmill as used for the Radiused Fingerjoints of the previous chapter.
A more expedient option is to use the full thickness of the stock for the tenon thickness and to cut the mortise with dogbones, possibly using a cove radius endmill to round off the mortise to allow the parts to fit snugly.