In the XY Pipe-Cutter interface for pipe cutting machines, the X and Y axes are used to move the torch in the two main dimensions. The Z axis is used to adjust the height and control the distance of the torch from the surface of the pipe. In this interface, the Y axis is considered a rotary axis, and a parameter called Diameter is available, which specifies the outer diameter of the pipe in millimeters. This allows the pipe to rotate for performing a full 360-degree cut. Additionally, the Z-axis height can be controlled automatically using smart height control, enabling precise adjustments.