When a Text Favorite is set to "Active Settings" it looks at the file setting and is not reading active dimension style setting from the element template or the tool settings.

According to MicroStation the Active Setting is set by the dimension style. If the dimension style is set to use the file units, it should adhere to them.

In addition if the settings in the dimension style are modified. The labels should update just like MicroStation.

Without this it leads to duplication of favorites to change units and precision settings.