How did you generate the code? Were you just using wizards? Which CAD program are you using? If you used a Cad program generally there are a variety of ways to have your tool enter and exit the stock. You could plunge, ramp, helical (like a corkscrew) and tangential (which I dont understand yet). These different techniques place different stresses and or allow the tool to achieve its depth before following a path to minimize the deflection as you experienced where the top groove was wider than expected. Or maybe they create a place of the chips to be evacuated at the start of a cut. Or a dimple or ridge at a start point of a bore. You also want to overlap if boring a hole or circle to minimize the entry points mark.
That is what I am guessing happened though it could be a few things. So much of this stuff has been counterintuitive to me. Rarely has higher rpm helped me and many times it has overheated the tool, the part etc.
If I am seeing it correctly there are plenty of chatter marks in your letters. This could be caused by many things, fonts, feedrates, gummed up flutes. There is much to learn and engraving will bring new challenges of which I dont have much experince but have made similar errors to you.
Also if the tip of the tool could go all the way thru the material so it uses the side of the tool to cut you would get a better finish on the final cut outs walls. Try doing the cutout with the 2 flute end mill. Also direction of cut is important. Climb milling has produced better results for me though I am getting better at both.