Guide
Spacing and bleed
Spacing and bleed solve two different problems. The builder handles one of them; the other is a choice you make in your own design file.
Spacing: the gap the builder packs in
Spacing is the gap the builder keeps between every design on the sheet, and between designs and the edge of the film. A wider gap gives more room to cut each design out cleanly, at the cost of more film for the same designs. A narrower gap uses less film but leaves less room for the cut.
When a printer's own page states a spacing it recommends, that figure appears on the printer's profile page. Where none is stated, you choose the spacing yourself.
Bleed: extra artwork at the edge of your design
Bleed is artwork that extends slightly past the edge you intend to cut, so a small shift in cutting does not leave a thin white line around the design. It is a property of the design file itself: how far the printed colour extends past the shape you actually want.
The builder does not add bleed to a design; it packs the file exactly as supplied. If your artwork needs bleed, add it in your design software before exporting the transparent PNG, then add the finished file to the builder.
Using both together
Set the builder's spacing wide enough to cut between designs safely, and give any design that needs it a small bleed of its own. Neither setting fixes a problem the other is meant to solve.