Look at the video, why is my surface doing like that?
Surface length of edges - YouTube
The Maximum Edge length command is designed to automatically reduce long skinny triangles around the edges of surface models, for example if you have a grid of points at 10m intervals the max diagonal is ~15m so if you set your Max Edge Length to 15 it will stop any triangle forming that is greater than 15m length which will mean that you have no holes inside the model and no long skinny triangles around the outside (that are erroneous.
Of Course Survey data is never nicely gridded or nice and clean. The TIN Engine will incorporate every point into the model that you say you want in the model. So if you have one point that is greater than your Max Edge length away from any other point in the model it will be linked in to the model with at least one triangle - this is the first case where the Max Triangle Side length is broken (it has to be broken because you want the point in the model but you set your edge length too low so it overides).
At the other end of the spectrum if you set your edge length parameter too low, then the software is trying to remove triangles that fail the value that you set, however the software has to link in all of the points that you requested in the model, so it forms an alternative triangle to achieve that - at this point you start to see complete randomness in the surfaces because we do not do a check whether this triangle that I am removing is smaller side length that this triangle I have to form to add the point into the surface.
So I know you are really just experimenting and you really just want to know what is happening here - the general rule for use of this is pick a distance for this parameter which is greater than any point to point distance that you want around the Outside boundary of the surface. If you go lower than that distance you can expect more indentations in your boundary and then holes in your surface model, if you go very large then you will get closer and closer to what is called a Convex Hull - where the entire outside edge of the surface model is convex (approximates a chorded ball) and no more triangles can be formed. The key is to pick the distance that works best and then use the Trim Surface Edge command to clean out any remaining edge triangles that you don't want. Once you have the surface as you need it, I always add a Surface Edge Breakline which then acts as a permanent wrapper to the surface to constrain it for good (if you dont do this, and you add a point to the TIN or you change a Breakline or you change a property of the surface, the TIN gets reformed and you have to start over.
Hope this answers the question - what you are seeing with very small max edge lengths is the random behaviour that happens when your value is too small.
Once again, a great answer. Thanks!!
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