Confused - Key presses not consumed - Specific Keyboard Selection

I'm a little confused and forgive me because I'm new to BTT I was previously looking at using USB Overdrive.

I have an external keyboard, a self built x-keys if you like, I'm building that I want to use. I've got BTT to learn the key press from the specific keyboard with no real issues. The problem is that I don't see how I get BTT to consume that key and not pass it through. Here's what's happening:

  1. Send key from my keyboard
  2. Key is passed to underlying application (in this case it moves the cursor)
  3. BTT realises a key sequence was pressed and does an action (in this case launches an application).

The problem is 2) I don't want that key to reach the underlying application at all. I'd assumed that BTT would intercept the key not just tag itself on the end after the OS used it.

How do I prevent this?

I've also noticed that the wording for the trigger conditions keyboards is different on "Keyboard Shortcuts" ("Works on keyboards with the same type as used for recording") and "Key Sequences" ("Recognize only on keyboard used for recording the shortcut") - does this mean the same thing or actually what it says? If the latter why can't I pick the 2nd option "Recognize only on keyboard used for recording the shortcut" is I'm doing a shortcut?