A large number or letter embroidered as solid fill is slow to run, heavy on the garment and stiff to wear. Appliqué swaps that fill for a piece of fabric, so the machine only has to mark the position, hold the fabric down and cover the raw edge.
That only works when the file is split into clean stages. If placement, tack-down and cover stitch share one color stop, the machine never pauses for the operator to lay the fabric, and every piece ends up placed by eye.
The cut piece matters as much as the stitching. Fabric cut too large shows past the cover stitch; cut too small, it leaves a gap at the edge. That is why the template ships with the file, whether the job is team numbers on jerseys, Greek letters for chapter and spirit wear or a large jacket-back design.
Every appliqué order includes a PDF cutting template at exact finished size, so the fabric you cut matches the outline the tack-down expects, whoever cuts it.