I put in a new unbroken bit and tried to make some surface-mount-sized traces.

The three vertical lines are spaced 0.05 inches, which is half the spacing for normal full-size IC pins. On the right I tried 0.025 and something else, but neither of those would work.

Looking at a picture of the carving bit in one of the cuts, it does seem like it should be able to cut thinner slots.

It's so tiny that I had to take pictures to see it clearly, but here's two photos of the same bit, in the same position, merely turned 180°.

So it looks like as it spins it's going to wobble back and forth a distance that is about the width of the cuts, and so that explains the width of the cuts.

I tried all of the bits I got with this machine, and I noticed some stay on center better than others. So I tried engraving the same pattern with one of the better ones. The result was a little better, but not much.

It looks a bit better after sanding, other than the cuts not being deep enough. Also, though, the previous one (at the upper left of this photo) also looks better after sanding.

Overall it kind of looks like surface mount PCBs might be possible if I could work out the problems, but it's not really my priority since I hate surface mount parts and don't use them unless I have to. Even if I could get this thing to carve thin enough traces, I'd still then have to solder the parts to it, and that's a PITA too.