The parameters here are mostly obvious, but there is one subtlety.
Start Depth is just that — the depth at which the cut will start, so if doing a box w/ a one-piece bottom and lid, the bottom w/ an inset raised portion could have the raised portion cut around, and then the actual Cutout toolpath using the perimeter geometry begin at the bottom of that pocket
Breakthrough is where the bottom of the cut is positioned relative to the bottom of the Stock (this is intended only for cutting out a part compleatly free), so positive values will cut below the material, while negative depths will allow leaving a small onion skin.
Cutout Type allows selecting whether the tool will only make a narrow cut, or if it will make two passes around the perimeter, or if the software will choose automatically betwixt those two options.