I just inserted an image. Now look what pops up when I click on the Offset drop down. A box appears with just a few options. There is a Distance which lets you control how big the outline or offset will be. Then you can choose either rounded corners or square corners.
Offset Tips
The default offset color is grey. I just clicked on the layer and changed the colors so you can see it better!
It’s really fun to play with different images and the Cricut offset function. I found this cute little gnome to my canvas.