The Angle Limit determines the amount of path smoothing performed. The allowable value range is between 0 and 1.33 (4/3), with smaller values resulting in less smoothing and more corners. The default value is 1, which is the optimal value. 

Generally, Angle Limit works best on images with higher resolutions. Angles are favored both by sharp angles and by long segments. Thus it will detect a corner if two short segments meet at a very sharp angle, and also if two very long segments meet at a slight angle.

Too many Angles:

If too many angles are detected, the output will look like a polygon and will no longer be smooth. 

Too Few Angles:

If too few angles are detected, the output will look too smooth and be too rounded.

Load an image. 

Leave the Angle Limit at the default value.

Click the Vectorize button. 

We get the expected results for the vectorization.

Just for comparison, increase the Angle Limit to a higher number.

Click the Vectorize button again. 

This time, it rounds out several of the corners.