Etsy gives you two option types and no more
A size, colour and material product has to fold down to two before it will fit.
A product that is size, colour and material on your WooCommerce site cannot stay that way on Etsy. Etsy allows two option types per listing and there is no setting that raises it. So the third dimension has to go somewhere, and you are the one who decides which pair survives. That decision belongs to whoever knows the catalogue, which is why it is worth making deliberately rather than discovering it halfway through a first sync.
Most sellers resolve it by combining. Colour and material become one option reading navy linen, leaving size as the second. That keeps each variant distinct and gives each one a SKU of its own to be identified by. Work the fold out before you connect, because renaming options on listings that are already selling is more disruptive than getting it right the first time.
The reason to settle it early is that the fold changes your SKUs, and SKUs are what the two sides match on. Collapsing three option types into two usually means renaming items, and every rename is another chance for the Etsy copy and the WooCommerce copy to stop pointing at each other. Doing it once, before anything is connected, avoids unpicking it while orders are arriving.