Sintered zinc oxide (ZnO) ceramic is a fragile and difficult-to-cut material, so finishing operations demand handling cautious and accurate surface tolerances by polishing, grinding, or machining. The conventional machining methods based on grinding and lapping offer limited productivity and high scalability; therefore, their incapacity to prepare tight tolerances usually end up with uncontrolled edge chipping and rough surfaces in the final products. This study investigates microstructural features with surface roughness in a comparative mode for conventional milling and abrasive waterjet cutting (AWJ). Edge topography and roughness maps are presented in this study to weigh the benefits of AWJ cutting over the conventional material removal methods by altering the feed rates. The porosity analysis implies that the differences during the multi-channel processing of varistors, which tend to alter the microstructure, should in turn exhibit a different response during cutting. The surface roughness, edge contours, and porosity generation due to shear forces are interpreted with the help of 3D optical and electron microscopy. The results demonstrate that the surface microstructure can have a noteworthy impact on the machining/cutting characteristics and functionality, and in addition, mechanical properties of ZnO varistors can fluctuate with non-uniform microstructures.