Hi Danny, no the unit system is just a label, it has no part in general calculations. If the numbers you are dealing with are say 0.012 then that's the actual number that's being used.
Otherwise if it tried to base things only really in mm (which I guess is what you're kind of asking about?) it would not be very feasible to use some kinds of units like kilometers for instance if you wanted to sketch out a racetrack or whatever.
Basically the numbers that you enter are the numbers that are used  if you enter in large numbers then you're using large numbers. If you enter in small numbers that have a lot of decimal places in them, then you're using small numbers. This makes things pretty easy to know what to expect  whatever coordinates or numbers you enter is what gets used, it doesn't get a whole lot more straightforward than that. There is the exception of course of entering in something with specific units attached to it which will then convert it at that point like if you have units in meters you can still type in 5in and it will auto convert it to 0.127 meters and that's the number that is then used in that particular case. But if you just type in plain numbers those are the numbers that you get...
It's generally good to pick a unit system that will let you enter in numbers that are not either too large or too small, more like a range of 1 to 100 or so instead of having features of your model at small numeric values like 0.001 units and also it's not so great to be using large numbers like 500000000 or things like that either.
But if you enter in a fillet radius of 0.001 units, MoI will try to make a 0.001 radius fillet, it doesn't matter what the current unit system is set to for that. There is some stuff in place to try and automatically refine the fitting tolerance downwards to be some fraction of the value being used in an attempt to kind of make small numbers still work ok. But tuning that up is a kind of ongoing process and for best results it just tends to be better to use a bit more "regular' numbers more like 20.2 or 50.22 or 2.2 instead of a lot of 0.001, 0.00025, 0.0006, etc...
 Michael
