if you use a straight bit (and I have done one or two inlays this way) the challenge is that the fit needs to be PERFECT. You also need to do some special treatment of the design so that you don;t get bad corners (remember that a round bit cannot cut square inside corners, with an inlay, ever corner is both inside and outside… so you just need to compensate the design for that). This is not easy to get right. assume you’ll be sanding the inlay pieces to size a bit
with a V bit, the slope of the V is what gives you tolerance for this fit, and your corners will be sharp (it;s a v carve). It’s more complicated.
for example see Using "Advanced VCarve" in Carbide Create 461 to make Inlays