For leather? Pin it down, no masking for the engrave, 2% power, full speed, 340 LPI.
If you want it darker, run a second pass on the engrave, same settings. Don’t try to do it all at once.
Then put some masking on before you try to cut it.
You’ll get perfect results. Leather needs to be tattooed not deeply engraved. (These opinions are my own, and as such YMMV.) 