Here's a Flow test using text and a cylinder. The text intersects the base surface causing it to intersect the target surface. Joined cylinder surfaces to make a solid and Boolean diff to create engraved text. Quick render shown in corner.

"... I maybe should make the base and target surfaces automatically shrink down to fit their shaded visible boundaries to avoid this kind of confusing result."

Please do. This really messed me up until I read the explanation and fix. Guaranteed it will mess me up again :)

Ed