No. It is for straight inlays.
Yes.
Cut pocket as a regular V-carve.
Cut inlay plug mirrored as an inverted vcarve (cut the space around the design away). The key is that you need to set your Z0 below the surface of your material for the plug. You can run the job twice with the second time being the one where Z0 is below the surface if your machine can’t handle the initial depth.The depth below the surface will be the depth your plug sits in the pocket.