The setting is only for displaying coordinates. For entry, we currently offer the DMS roller wheels, and Text entry. Text entry supports many common formats and you can find examples of them in our Help Manual.
We will consider adding DM wheels for a future update. For now you can also enter DM coord via the wheels simply by setting the S wheel to 0.
ahh OK your right.. I kind of forgot we were showing decimal precision with DM format. So ignore my earlier suggestions. And we will be including wheel entry for DM format with 2 digits of precision (I think thats the most that can fit on iPhone screen with the wheels interface).