Hi Kevin, just another illustration to add to the above.

If you zoom in on the top view, you can see that what looks like it should be a totally vertical cut is actually kind of misaligned:





That's a projected distance of about 0.04 units between those top and bottom edges.

Of course it would be nice if this would fillet anyway, but the fillet mechanism will tend to work a lot better when the pieces have greater alignment. It actually can be harder on it when things are set up like this when things are pretty close to being aligned but not quite, it tends to make stuff like slivery intersection results in the calculations.

- Michael