Hi Yenmonger, it actually does work on the original model you posted with a radius of up to 0.02 units.

But you can see where it is having a problem here:





Note the small slivery fragment that Fillet is creating there.

How were the surfaces there created, do they come from a Sweep? I think that there is possibly a very small tangent deviation at the closure point which Fillet is particularly sensitive to.

- Michael