Yes, it works just fine for hammer and chisel engraving, as long as you are using a graver with a 3/32" square shank. If it's permanently mounted in a handle, you'll need roughly 2 3/4" of shank exposed to mount it in the jig for sharpening. It's much easier however, if the shank can be removed from the handle to mount in the sharpening jig.
(A quick change handle can be made easily from a $1.79 Xacto knife handle, by removing the blade, tightening the collet back into the handle and drilling a hole down the center of the collet with a 7/64" bit.)
With this sharpening system you'll get the same angles every time without fail. All you need to watch for, is that you get the same "length" on your heel angles.