Can I cut dolls, clothes from magnetic sheets?
I think it ultimately depends on what’s inside the magnet sheets. Personally I would only laser magnetic material that is advertised as safe for lasering, like this for example: Rowmark LaserMag Brushed Silver/Black Magnetic Sheet
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You’ll want surface protection:
I think those are iron particles burning in air.
When all the cutting was done, the edge was crumbly & charred, perhaps due to my upcycling a magnetic sign found by the side of the road, rather than using laser-safe material.