Welcome to the forum.
Bitmaps/raster images can only be engraved. If you want to cut, you must have a vector path. It can be a little confusing when you are first getting started. Here is a very old post that may explain a bit of the process: Glowforge Interface - Vector Files Made Easy 🤔
For your particular project at hand, where did you get the file? Can you share a screenshot of it?