Have you reported the bug?  It's not very useful to report bugs to a forum that has absolutely nothing to do with the Blender Foundation.  And it's really easy to report Blender bugs.  In my experience, if it's simple they fix it in hours.  The one time they didn't, they still told me what they were planning to do.

Oh, and just to say, I use inset all the time without problems.  I don't think I've seen the tool you're talking about.

Hi, KK.  I prefer to verify what I am experiencing is in fact a bug, before I go reporting anything, which is why I posted here to begin with.  If you read this thread in it's entirety, you'll see that what I considered a possible bug early on, may actually be the way that particular tool works, because it's not necessarily intended for the modelling operation I was using it for.  The confusion being, there are two different inset tools in Blender, which seem to be intended for different results or purposes.  The tool i was originally referring to was the "Inset Polygon" tool, which needs to be enabled in preferences before it shows up in the Tools panel at the left of the Blender UI.  As Luxxeon and Roygee have kindly pointed out, this is NOT the same tool which gets called upon from the hotkey, "I".   The inset tool you are using, most likely, is in fact the "Inset Faces" tool, which I'm assuming has replaced the Inset Polygon tool in recent versions, and is assigned to the default inset hotkey.

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Tools :  3dsmax 2015, Daz Studio 4.6, PoserPro 2012, Blender v2.74

System: Pentium QuadCore i7, under Win 8, GeForce GTX 780 / 2GB GPU.