If Auto round is enabled, arcs are inserted at all sharp corners. This applies only if Cutter comp is enabled and you have a leave allowance or if Cutter comp is not set. If you have enabled Modify outside corners, it does not perform any further rounding on these corners. It rounds inside corners (even if Modify inside corners is enabled) by inserting an arc before and after the circular corner as shown below: The radius of the inserted arcs is equal to the radius of the wire.
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Wire radius