Okay, couple of things…the HD Engrave setting for engraves is going to engrave deeper and it will char more, but you are going to get just as good an image (for large sized puzzles like this one) if you use the SD Engrave setting. And it will send less data to the machine so it won’t overload the buffer. But it has nothing to do with the resolution of the picture…if that one starts out as a high definition image, it will be engraved that way.
What is kind of important when you are engraving photos is to bump the contrast a little…it makes for a much cleaner engrave instead of a muddy-looking mess. And you’ll want to use the Photo Engrave settings, which is dithered.
There are a couple of great tutorials here for prepping the photo for engraving: