Maybe I’m not using the right search terms so any links to previous posts that discuss this are welcome.
First, yes I know, Luban is limited for CNC work. I’m not ready to go into Fusion, yet.
In using the Allowance parameter for a relief carving, if I have a 5mm deep carving to do, and I set the Allowance to 1mm (meaning 1 mm will remain), can I use the 3.175mm Ball End Mill to rough out the work and then use the Carving V-bit to finish the carving?
If so, how do I set the Carving V-bit parameters to prevent the V-bit from carving air for most of the time?
I have not used this for a time but as I know it is not possible to do multiple processes with rest-model carving in Luban as in fusion360.
Its a steep learning curve but fusion 360 is worth a try 
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Start here:
So, I wonder, what is the purpose of the allowance setting in Luban?
I think it is exactly as you describe in your first post: It tells Luban to leave x mm of stock material, and not go down to the surface of your target object. But Luban does not have rest machining, i.e. it does not remember what it cut away already between passes. Also, note that Luban as of now does not seem to take the tool diameter fully into consideration - at least in some cases: Luban 4th axis milling is cool! And dumb... And dangerous! - #2 by Hauke I personally think that if Snapmaker would invest a bit more in the milling code, it might be extremely helpful and cool, but as it is now, it has too many limitations. I use Fusion 360 for milling jobs - here’s my learning object, some tutorials by others linked there: Learning to mill: Random chinese dragon bas relief
EDIT: This tutorial: Multi-Pass Rotary Guide, although for the rotary, gives a “workaround”: Use a roughing pass with an allowance that the final pass is able to cut away in one pass. Then do a second job with a stepdown so large it does the whole cut in one step with the finishing tool.
Here’s my old guide for CNC relief carvings in Fusion when you’re ready for that dive. 
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