G code problem (using Newfangled)

Hello I would like someone to check this out for me if you don't mind?

Running Mach(tried lockdown and newest), Using Newfangled (tried lockdown and newest) cut circle groove.
After entering parameters I select preview and all looks ok.
Select Post Code then verify tool path and the tool path changes?
Here's the code produced and I noted corrections to make it work with out lead-ins.
it seems like it sets up for the cut then does a tool comp for inner cut half way around then goes back to outer cut?

Have a look and let me know what you see.
Thanks,
Robert

(Code by Newfangled Wizard, 5/25/2008)
(Program Posted for Aluminum )
G0 G49 G40.1 G17
G80 G50 G90 G98
G20 (Inch)
(***** Circular Groove/Cutout *****)
M6 T2
M03 S3500
M8 (Flood On)
G00G43 H2 Z0.1
G00 X3.9799 Y-0.1437
G42 P0.125
G01 X3.8362 F17.5
G02 X3.6925 Y0 R0.1437 (change to G01 and remove R0.1473 )
G01 Z-0.03 F8.75
G03 X-3.6925 Y0 R3.6925
X3.6925 Y0 R3.6925
G00 Z0.1
G02 X3.8362 Y0.1437 R0.1437
G40
G00 X3.9799 Y-0.1437
G42 P0.125
G01 X3.8362 F17.5
G02 X3.6925 Y0 R0.1437 (change to G01 and remove R0.1473 )
G01 Z-0.06 F8.75
G03 X-3.6925 Y0 R3.6925
X3.6925 Y0 R3.6925
G00 Z0.1
G02 X3.8362 Y0.1437 R0.1437
G40
G00 X3.9799 Y-0.1437
G42 P0.125
G01 X3.8362 F17.5
G02 X3.6925 Y0 R0.1437 (change to G01 and remove R0.1473 )
G01 Z-0.09 F8.75
G03 X-3.6925 Y0 R3.6925
X3.6925 Y0 R3.6925
G00 Z0.1
G02 X3.8362 Y0.1437 R0.1437
G40
M5 M9
M30