If you choose 2D, the operation finds the 2D boundary of the selected surfaces and offsets the cutting passes from there. If you choose 3D, the operation finds the 3D boundary.
Use 2D for parts with a flat surface bottom and vertical or near vertical walls, as in left picture in the following illustration. The picture on the right might be undesirable, so may want to use 3D for that case.
Boundary Method set to 2D
Use 3D for parts without a flat surface bottom, as in the following illustration.
Boundary Method set to 3D
