When set to [Truncate: First] the construct circular fillet command will not accept the second element if it is a reference file even though it does not need to be modified. If set to [Truncate: None] will place the fillet however the first element must then be manual modified.
As my colleagues mentioned the current behavior is WAD(Work As Design). We discussed internally and created enhancement # 590685 for this request. ~Sumit
Answer Verified By: DavidG
Regards Andrew Bell