Strange, indeed. That preference (Minimum chip value) is supposed to represent the smallest chip value that you want to be abbreviated. It makes sense to set it to 1,000, since this is 1K, the smallest amount that will still be greater than (or equal to) 1 when abbreviated, but you could set it to say, 500, and get .5K, if that's what you wanted.
But for some reason, the abbreviation code is skipped if this value is less than 1000. I have no idea why I would have put that in there. At first I thought it was supposed be if the chip value we're abbreviating is less than 1000, then skip it, which sort of makes sense, unless you want .5K as I described above. So now I'm wondering if maybe it was there as a debugging step I forgot to remove.
So, for the moment just leave it at 1000. Values less than 1000 won't be abbreviated. I don't think you want to abbreviate your $25 chips, anyway, do you? It would abbreviate to $0.025K.
Edit: actually, it would abbreviate to $0, because it only displays to a single decimal place, which would be $0.0, and that is then converted to simply $0