The first is illustrated in this photo. In 2003, the U.S. Air Force Thunderbirds lost a jet at a Mountain Home Air Force Base, Idaho air show. The pilot ejected, or punched out, safely less than two-tenths of a second before the plane hit the ground. In fact, this photo is the first ever taken of a real-world ejection.
The second type of punching out is when you decide to leave the Air Force. The analogy is as if you were the pilot (you) abruptly leaving the plane (the Air Force) before its scheduled landing (retirement).
No doubt, my punching out is the second type.