I did some tooling on the top of a some saddles a couple years ago. As you say, cutting into the leather, especially into the toughest part of the leather, doesn't seem like a good idea. So I did these entirely without cutting; just pressing the leather down.
But I did that after forming the leather; in the process of forming a piece of leather into the shape of a bicycle saddle you have to apply a lot of brutal force, and if you do any embossing or tooling before shaping the leather, you'll lose it. At the very least, you'll ruin it. Basically, you have to do the rough stuff first, and treat the embossing as a finishing touch. As [MENTION=367427]xiaoman1[/MENTION] said, you have to have a block underneath. That is, you have to press the leather between a tool and an anvil. So with a saddle, the 'anvil' has to be a piece of wood carved to the exact shape of the underside of the saddle. So I've made a block that shape for embossing the top the 'Swallow' shape, or the sides of a 'professional' saddle. But it's a lot of work.
I'd be happy to do it again, if anyone wants that, but it'll have to be a specific request.