well technically i dont think a tattoo machine is supposed to "cut". i have one and i've seen how it works. i'd say its more like a poking of holes into the skin than actually slicing it.. ink rubbing is where you cut the skin open (usually with a scalpel) and rub ink into the wound. a tattoo gun isn't supposed to do that.
ill ask around about the cuts.. that seems really abnormal to me. but i'm not a tattooist and i cannot say for sure.
