I know this has been mentioned before, but I wanted to give you another example of the galaxy settings seeming to be ignored when the galaxy is created.
Here is a link to a save that you can look at:
https://www.dropbox.com/scl/fi/7sm5y30etmrwhz1bc09s1/Galaxy-Settings-Issue-Under-1.60.417998.GC4Sav?dl=0&rlkey=rxlet63oyqq014bx6ec5wd3eo
After you load the save you will see that I am at the beginning of my second month and an Onyx Hive probe is already near my home world. How does this happen when I set the Civilization Proximity option to "Far"? Even though I set the Galaxy Size option to "Small" and the Number of Sectors option to "Singular", I would expect the game to start my only opponent civilization (the Onyx Hive) to the opposite side of the sector, not right next to me.