the 3D paths are for “3D cutting”, for example as done in Cutting STL models with Carbide Create Pro (nearly-2021 edition)
sounds like you have a more “normal” 2 1/2 D cuts.
I would tweak your suggested path a little bit. I would do the first cut of the inside shape, not on the actual inside shape, but of an “inside offset” of the inside shape, by say 0.01" or 0.02".
That way your 3) becomes mostly a finishing pass taking off only a little bit which tends to give a nicer cut quality