How should I think about targeting each engagement level?

Keep in mind that engagement across each level is unique to every brand. In general, think about segmentation this way:

• Highly Engaged: These are your profiles showing the highest likelihood of engaging with an email today. Send almost every campaign to this group for the strongest click rate and revenue lift. This audience is also a great candidate for resending campaigns during sales or launches.
• Moderately Engaged: Generally it is a good idea to include this segment in at least 25-50% of your campaign sends. They're not your most active profiles but they're showing enough consistent signal that sending regularly is unlikely to hurt deliverability, though it may slow click rate improvements. This segment is a good default inclusion for many campaigns.
• Slightly Engaged: Where you start to make judgment calls. These profiles have some intent signal, but it's weak or infrequent. Including them in every send will start to drag down your deliverability metrics and will drive lower amounts of revenue than your top segments. Better suited for occasional sends, promotions, product launches, or seasonal campaigns where relevance is high enough to justify the reach.
• Rarely Engaged: Treat with caution. These profiles have shown very little interest and sending to them regularly will hurt your deliverability more than it helps your revenue. Reserve them for infrequent sends during major sales or product launches.
• Not Engaged: The riskiest group to send to and generally not recommended. Sending here is likely to generate unnecessary unsubscribes, spam complaints, and inbox placement issues. If you send to them at all, it should be rare, intentional, and ideally using the drafting strategy, letting your top segments build positive signals before this group receives the campaign.