it looks to me like they just embroidered it and then used something to cut closely to the outside satin stitches. maybe like a hot knife or something...
Tack the material to crisp stabilizer about 3layers do the design the a wide fill satin around the edges. Stop the machine and cut the fabric away from the design then do the satin stitch around the out side when done just remove the patch
Merrow border generally isn't as crisp as an embroidered border so if you can get away with embroidering it, life will become cheaper and efficient for you.
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