I know we have discussed this before, but I couldn't find the posts and so I'm starting this thread. Hopefully, it will be easier to find next time I get asked.
Question is: Do I need to add an inset or compensate when using the 3/16" cutting bit?
If you are using the Cut Path Tool with the 3/16" cutting bit, than it goes by the edge of the bit, whether inside or outside the path.
If you are assigning the 3/16" cutting bit to a vector path (drawing tools included), then it goes by the middle of the bit.