Start by measuring the kerf along both X and Y axes, perhaps with this tool:
Do that for whatever material you’re cutting, using whatever settings are appropriate. The non-square laser diode spot will likely make the X and Y kerf different, which means you will be unable to pick a single value to optimize the dimensions in both directions.
LightBurn follows very simple rules that sometimes conflict with our more complex expectations.
After you measure the actual kerfs for your machine, practice with simple shapes, thin cardboard, and single passes to show how the offsets apply. In particular, measure the size of holes in those shapes, as well as the effect on notches and protrusions along the edges.
Applying absurdly high kerf and offset values helps me visualize what’s going on: there’s nothing like having a hole vanish to remind me I’m applying an offset in the wrong direction.
The kerf width depends on the material, speed, power, passes, and direction. You may find a single value that’s “close enough” for what you’re doing, but you may also need to adjust your designs to match the ability / accuracy / repeatability of the tool producing them.
I’ve learned not to expect accuracy closer than about ±0.2 mm from the nominal size for any particular part in repeated runs, even with the round spot of my CO₂ laser.