Not sure if it is really a bug as such, but it is rather annoying.
I have had some issues constructing wheels intended for 3D printing. Some of them came out with slight gaps or weaknesses at points/circles where I had inserted circular parts into each other and used Union to make it a single item.
The tool works fine with flat surfaces and of course also if the items actually intersect.
My guess is that it is due to the fact that circles are a bunch of small straight lines that might not match perfectly. I can work around it by making sure there is an overlap, but it would be nice if the tool could identify that two circles inside each other should be a perfect match.