laser is engraving the negative space
M42 command is an immediate command. This means that it will run before the move GCode commands finish. This is exactly what I was facing. 

This video has the walk-through of solving the issue: 
                
            

Here is the relevant PDF it talks about: The 2.8 watt, $100 Laser
Upgrade for MPCNC.

Here is the relevant section on page 7 of the PDF:


  
  The laser driver requires a 5 volt TTL input control signal. The
  Marlin fan control Mcodes (M106 and M107) will be used to
  control the laser .Unfortunately, the Ramps fan output (D9) is a
  12 volt signal so we can’t use it. We'll need a quick firmware edit
  to remap the fan output from pin D9 (12v) to pin 44(5v).
  Make a backup copy of your Marlin firmware folder first. Open
  the pins_RAMPS_13.h file in your Marlin firmware folder with a
  text editor (Wordpad). Search for the line where the fan pin is
  assigned and change it from pin 9 to pin 44.
  Save the changes and flash the revised firmware back onto your
  Mega board.