While playing with the insignificant distance and insignificant angle settings, it looks like the insignificant angle test overrides the insignificant distance test. That is, if you have two points in the middle of a long line that are very close, say just a few dozen units apart, but form, say a 20 degree angle...
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... the optimization code does not remove either of them.
Actually, what i think would be best in that case would be to replace both points with one point which is the average of their two positions subject to the maximum vector length, of course. I haven't looked at the action of the insignificant point code on its own, but it was a thought.