Hi Joe,
The Confine Cuts option is really just there to specify whether the cutting tool's diameter should be kept within the canvas volume itself, as opposed to if the center of the cutter is allowed to reach the extents of the canvas volume. Personally, I just try to do whatever keeps the canvas XY dimensions as small as possible to eliminate any unnecessary computation when editing and manipulating layers, or generating certain toolpaths. The canvas volume is really just an area you want to generate cutpaths inside of. Some people like to think of it as their workpiece or stock material, but that tends to result in a lot of "unused" space that bogs down computation.
If the Confine Cuts option helps you do something then I say go ahead and use it! :]
- Charlie