The way I am reading this, the specific indentation amounts are intended to correspond to “standard” tab stops depending on which units you’re using – quarter inch, half centimeter, etc. It’s worded a little oddly, but I believe that the intent (which matches the reported behavior) is that it will snap your indentation to the next standard interval, not use that interval.
Basically, imagine that this functionality is tracking a virtual set of tab stops and adjusts your current indentation to the next virtual tab stop. So at 0.4 inches, decreasing the indent would move back to 0.25 inches (as observed) and if you’d started at 0.52 inches, it would go to 0.5 and then 0.25, if you did it twice.