I always assumed the "kill" setting pumped the target with enough energy to turn it to plasma—which means anything nearby would probably be scorched severely, or splattered with anything that wasn't vaporized. But I don't think anyone wants that kind of realism on TV or in movies.
Whether "phasing out" of our universe, or disintegrating to atoms, I also thought it rather neat the way only
the intended target was destroyed—no holes or scorch marks on the floor from the phaser effect bleeding over into the surrounding area, or perhaps clothing rags left over from incomplete
destruction of the target. (e.g. The motorcycle cop's smoking boots in the movie REPO MAN.)