My answer here is based on my personal experience and not intended to the the "end all" to the situation.
Depth of cut is dependent on several factors, but most important is the end use of the item and how much wear and tear and flexing it will receive.
The top grain of leather has about 70% or so of the tensile strength so if you cut through the top grain (epidermis) layer you will start to compromise that strength. Therefore if you are carving in an area that is relatively flat and open and not subject to flexing you probably can cut through the top grain and not see any drastic results and it should offer deeper and more definitive tooling.
If you are carving in a area that will be flexed quit a bit (i.e. the fold area of a pouch sheath) the the depth of cut should be reduced by about 50% at least, otherwise it will tend to split when flexed. The cut will actually open up and believe me it does not heal with time.
So the short answer to your question is to cut just deep enough to accomplish your goal wherever that goal may be.
Good Luck!
Paul