There’s two things:
- Single color engrave - you set the depth once.
- 3D engrave - you set the maximum depth. Black pixels are that depth, grey pixels are more shallow, white is left untouched.
You almost always want to use single color engraving as it’s easier to design for and offers very precise control. For example, if you have clip art, you can separately assign engrave settings to each color. But if you have a 3D design that you’ve converted to a heightmap, 3D engraving is the way to go.