How to exclude a shape from within a shape from carving?

I am trying to cut out a rectangle within a larger rectangle.The smaller rectangle is meant to be cut out, while the “border” of the larger rectangle will be carved out into a pocket. But in the simulation the machine carves down the entire large rectangle and then cuts out the inside piece. Obviously the carving of the smaller rectangle is a waste of the machine’s time, not to mention wear and tear. Is there a way to get the machine to not carve out the smaller rectangle, just to cut it out?

Yes, you can place a rectangle over the part that you don’t want to cut and set the depth of cut to 0. I have to go but will look at it more in the morning if someone hasn’t got you going.
In the file that I shared select the 2 rectangles to the left and combine them, it will leave you with 1 rectangle.
I hope this gets you started.