I have a simillar problema; I have the MACH3 Version R3.043.022
When I use FeedHold in my computer as a simulation during an arc cutting and then restart with CycleStart the MACH3 just won´t go back to the following coordinate it makes like an elipse, if I do the same on a streihgt cut it will work just fine.
When I use the cutting cnc machine with the same program  it does exactly the opposite, FeedHold on an arc cut and then Cycle start it will keep the correct path and follow the coordinates but a FeedHold on straight lines cutting and then CycleStart won´t go to the coordinate, can anyone help?
I cut EPS Foam, I only use 2 axes (X,Y) with the MACH3, and I use cutting wires instead of tools.
Here is my program

G90
M3 (cutting wires ON)
F400
G0X250.0000Y110.0000
G1X260.0000Y110.0000
G91
G1Y-100 (Cycle starts)
G1X100
G1Y50
G1X-20
G3X-60 Y0 I-30 J0
G3X60 Y0 I30 J0
G1X20
G1Y50
G1X5 (Cycle ends)
G91
G1Y-100 (Cycle starts)
G1X100
G1Y50
G1X-20
G3X-60 Y0 I-30 J0
G3X60 Y0 I30 J0
G1X20
G1Y50
G1X5 (Cycle ends)
G91
G1Y-100 (Cycle starts)
G1X100
G1Y50
G1X-20
G3X-60 Y0 I-30 J0
G3X60 Y0 I30 J0
G1X20
G1Y50
G1X5 (Cycle ends)
G91
G1Y-100 (Cycle starts)
G1X100
G1Y50
G1X-20
G3X-60 Y0 I-30 J0
G3X60 Y0 I30 J0
G1X20
G1Y50
G1X5 (Cycle ends)
G91
G1Y-100 (Cycle starts)
G1X100
G1Y50
G1X-20
G3X-60 Y0 I-30 J0
G3X60 Y0 I30 J0
G1X20
G1Y50
G1X5 (Cycle ends)
G1x15
M5 (cutting wires OFF)
M30

Tried your code here and it looks like a BUG. I fails the same way both in G21 or G20 mode. So it is NOT a metric thing.

(;-) TP

Any ideas to fix my problem?

NONE that I am aware of.

(;-) TP