Honestly, this feature is so commonly misunderstood and is the source of much frustration. I often think it should be removed, or at very least made off by default.
Length snapping controls the length of lines (and objects). If you have it set to 1’ increments (I’m using a big number to illustrate a point) then you will only be able to make lines that are in multiples of 1’. So you can draw a 1’ or 2’ or 30’ line, but not a 2’8" line. It does not set up an invisible 1’ grid of snapping, so you can still start a line anywhere in space, therefor objects do not line up on any sort of grid by default, but once started things can only be made in increments of 1’. This snapping applies to all the tools, rectangle, circle, push/pull etc. This setting can be overridden by the inference engine if it detects an inference point to snap to. So in theory with snapping set to ON one could still make lines that are not 1’ by using existing points to snap to. A triangle for example, the first line would be say 6’ and the other side 4’ and the hypotenuse would be whatever length necessary, but you would have to make the hypotenuse after the other two lines so the inference engine could help you make a line in something other than 1’ increments.
In practice when length snapping is set to ON it often introduces small errors in the model. When set to 1/8" for example and when drawing a line that would naturally need to be 8 3/64" to close a loop, It can be very hard to notice if you are truly snapping to the end of an existing line, or snapping to a line length of 8 1/8" and are only coming close to closing the loop the way you intended to. Often the difference between being “square” and being within an increment of the length snapping are very close. The differences are too hard to see and it’s too easy to go right on modeling continuing to reference the initial error and compounding it with more small snapping errors thereby building chaos into your model.
It really serves no function other than to occasionally give you false a snap that does not line up with the rest of your model. Very rarely I will use it by setting it to 10’ or something to make it easier to move existing things around in a grid for visualizing spacial arrangement problems. But for any modeling, it should remain off. Entering exact dimensions by typing and using inference on existing geometry is the path to a clean square model.
or, more succinctly,