Connecting FiftyThree Pencil
Go to Settings > Stylus Settings > FiftyThree Pencil. You can add a shortcut to this dialog from the "Stylus Settings" screen.
Use the Finger dialog to select an action for your finger when using Apple Pencil or FiftyThree Pencil. Go to Settings > Canvas Settings > Finger Settings.
The Cut option is only available for users who have access to the Cut Tool. Legacy users as well as Paper Pro subscribers have access to Diagram, Cut and Fill tools.
Apple Pencil cannot be connected through Paper. You must connect Apple Pencil to your iPad Pro, and then Apple Pencil will work in Paper without any setup.