Nope. That setting is just for rendering arcs from abstract ideas like circle, arc, ellipse, elliptical arc, etc.
What you are looking for is
[Tab] system settings
option '1' insignificant angle in degrees.
If the simple angle found in the span of three points (of the same color) is less than or equal to the "insignificant angle in degrees" then the center point of the three is removed.
This is how LaserBoy reduces a string of vertices (all on the same line) down to a single vector.
This is a tricky thing. It can really eff things up!
Have fun!
I should rework the code for this too! It should go forward, backward, every other, every other backward and compare for best results. Or something.
James.