Why do they need to be embedded in your final manuscript file?
When you upload a pdf (Portable Document Format) of your manuscript to Ingram or Lulu, the interface will reject it if the fonts are not embedded. Do you wonder why that is?
While most folks use a standard font when they publish, not everyone does. Not too long ago, to use a font in your published manuscript, you needed a license for that font. At that time, you would embed your font to make sure the correct font was used so the owner of that font couldn’t come after your for money.
When Amazon and other self-publishing platforms started publishing ebooks (i.e., Kindle, ePUB), the platforms licensed the fonts that their ebook readers used, and the user-reader could select from a variety of fonts available.
Some small publishers purchased licenses for the fonts they intended to use in the books they published, and stuck to them.
In today’s self-publishing landscape, I think using the standard Times New Roman is just accepted now (although, personally, it is not a favorite font of mine; I purchased a license so I could use Deja Vu was back in 2012). But if this is the case, why do you still need the fonts to be embedded?
Part of it is the systems used to print your book: it’s just a big computerized printer, and not a word processing application with all the fonts available. If it isn’t in the file, it won’t print.
Wonder what that looks like? Try opening a Word file on a different computer where the font you used isn’t available. It can look really messed up. And if you used a funky font for any reason, say in a graph, it could come through in the end product as something completely different. This happens a lot for me when I get a new computer and haven’t updated all my fonts and open an old file.
And if you do download a special font (free for commercial use fonts are available at sites like dafont and fontsquirrel), be careful: not all fonts will render properly in italic or bold unless those characters are included in the download. So test them before you commit.
It can be fun to use a special font for your chapter headings or for diary entries in an otherwise standard narrative, you just need to make sure they are available to the printer when the time comes, and embedding them in your file is the way to do it.