One of the projects I was looking forward to getting a Glowforge was cutting emptied walnuts into small jack-o-lanterns. I have done this in the past with a dentist drill fitted with a very small carbide bit. With a small bit of foam, to defuse the light, these were mounted on electric tea lights. Again, these were done with a dentist drill, not the Glowforge.
My first attempts with the Glowforge were disastrous. The walnuts shells would either catch on fire or just smolder, exuding a great deal of smoke and something like pitch. As it turns out, there is a lot of resin in walnut shells. The fan would blow this ‘pitch’ directly onto the dropdown front door of the unit. The only thing I found that would clean off this residue was lacquer thinner. I know, how crazy is it to use something a volatile as lacquer thinner in a laser cutter? I let it air out a very long time before ‘firing’ up again.
I tried using very low ‘cut’ settings and, after about 20 passes, got very poor results. I can cut these out with a dentist drill much quicker and without gumming up the insides of my GF. On the plus side, making a single pass I can ‘draw’ the outline to be drilled out with much greater accuracy and repeatability than freehand with a pencil. I just need to alter my artwork to adjust for the laser kerf.
Dry those walnut shells out in a low oven for a day or two, then try again. I think your problem is that the shells have too much moisture in them. I use crushed walnut shells as a polishing material for some of my 3D prints. Have to keep it desiccated or it doesn’t work well. It absorbs a lot of moisture. “Hygroscopic”.
Walnuts vary in size, but mine, what I would think of as a medium size, are over half an inch in height when halved. For starters, I carefully split the walnuts and clean out the meat (good for baking!). To put in the GF I have to remove the crumb tray and place the shell half on a block that brings the highest point of the shell to about what would be a ¼ inch above the crumb tray height. I place that as directly under the camera as I can to better ensure proper alignment. As this is an unknown material to the GF, I enter a height of ¼" and make a lot of guesses on settings.
Nuts are a good source of oil generally. After halving, I would use a wire brush or something to clean out the stuff under the shell, then I would roast the empty shell at a temp just low enough to keep them from burning to drive out all the oils, and wash them in soap and water.
If cut while still wet at least what is wet will not burn while it is wet, and the laser fire is enough to instantly dry where it is cutting. There are lots of places that would need experimenting but the result might succeed