In a drag knife system (like Roland's), you need the cut point to trail the center of the blade so the blade self-orients.
There are a couple systems that employ active blade rotation but the majority of systems are drag knife systems.
If your blade offset is too small (worst case 0) your corners will be rounded similar to fillets.
If your blade offset is too large, your corners will have little hang nails.
If your blade offset is just right, your corners will be nice and sharp.
Note that the setting can be defined on the plotter in addition to the software, and typically is.