the 2 borders ( in your piece ) are composed with small segments ... you need to use Join to obtain 2 perpendicular lines

and then large fillet can be applied

As corchet said, it is because of that broken edge.

So select any edge, press Ctrl + A to select all and use the Merge command.

Also if you select the whole object and run Merge that will also target all the edges of the object.

- Michael

Thanks all for the tips!

wim