Assuming this calculation is correct, from my experience you can cut plastic and wood: https://chaos.social/@jaseg/111697386931635059

But it won't even mark steel unless you pre-prepare the steel with absorbent inks, and definitely won't cut it.

It's less power than a phone flashlight.

But in laser form. Does that change things much?

Being laser in itself is afaik less of a factor, but being IR and a very small spot are more so.

Now this might be my layman knowledge, but "being a laser" seems to imply "a very small spot", no?

No, not really. Laser beams have a width and that can be adjusted. As it comes out of the fiber, it forms an expanding cone which you would then modify with a lens (https://content.coherent.com/legacy-assets/literature/white_...)