Digitize, can it be done with the software?

can you digitize a logo that is in color so you can engrave to a tumbler?

This will depend on your definitions of “digitize” and “color”.

Can you elaborate on what you’re trying to do and what complications are potentially in the way?

At a guess (because I may not understand exactly what you are trying to do) it sounds as though the trace function might help - it depends whether there is sufficient contrast between the colours.
If that doesn’t work well enough you could try some vector drawing software. A lot of what I do involves tracing from images and I usually use vector drawing software for this (Affinity Designer in my case) - export the result as an svg file which Lightburn then then import. Ungroup the drawing in Lightburn and then sort out your layers/colours/cuts and fills.

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