||thanks for responding,
The data were constructed from scratch in an SDE geodatabase in SQL Server. We didn't import anything. There are no splines that I am aware of. The XY tolerance of the feature datasets is .001 meters and these values are lower, so they may not be snapping when the new split polygons are created. Seems to me I read once about another geodatabase tolerance/precision that is set up in the database, perhaps through SQL or SDE admin procedures. I am not our DB admin and he is out.
I find it odd that a previously good boundary of a polygon gets its coordinates changed by such a small amount when the new split polygons are created. They do not align with the existing adjacent boundaries as they did prior to the cut operation. Also, this does not happen on all occasions but is not rare either. I will look into the "SnapToSpatialReference" option.
thanks again and welcome any other insights,