You either have a drill with a separate hardened steel guide, or the drill itself is on an eccentric spindle with a guide at the top that is anchored to the spindle to force it to run in the square hole cut pattern. In any case it does cut a square hole with slightly rounded corners, and does quite well in soft materials. For harder materials you are better off using either a broach or a punch in a press. This works well for a few holes only, for high volume it is expensive both in time and tool wear. There you will use a punch, and then you can do a large number of holes, recesses for screws and panel display cutouts along with starting the box forming all at the same time on a large sheet that is positioned for the next stroke.