How does the Inset Boundary option work? Insetting the two faces shown on this mesh (which has a mirror modifier) and pressing B seems to work as intended, toggling whether the middle edge is inset or not.

However, when insetting the face shown here, toggling the Boundary option does nothing.

Why is this?
The boundary option on an inset faces operation will only inset new faces where the mesh doesn't have a boundary (where the edges connect 2 or more faces).  Where face edges have only a single edge, no new edges will be created:

Any difference in behavior from toggling &quot;boundary&quot; on the operation depends on whether the edges of the inset face are manifold-- which is not apparent in either of your flat shaded example images.