The setting tracks the RoundFlashSides variable. If the variable is not set, 32 sides will be used. The acceptable range is 8-256.
The setting applies when new round objects are created with the round, donut, and arc buttons in the physical side menu, or the equivalent script functions.
In electrical mode, the number of sides used has a separate setting using the ElecRoundFlashSides variable, which can be set from the sides entry in the menu presented by the shapes button in the electrical side menu.