Inset Tool Selection Bug

I've noticed the inset tool acting weird with selections after use. Pictures are captioned to explain how to recreate the bug step by step. Also to show the madness I am doing to this face to get the look I needed. Not a big deal but thought I would share. 

This is a great example to make curved assets. Before seeing this I was finding it difficult to come up with a simple way to make rounded edges. Thank you.