Hello @Anonymous and welcome to the community,
The display units are which units will be displayed for tools and spinners. So for example if generic display units, a chamfer amount of 25.68 might look good, but how big is that exactly? For general artwork it might not matter, but for architecture it's important. If you want to see that in cm, inches, or feet... changing the display units allows for that. 25.68 generic is roughly 10 3/32".
The system units are for lighting, dynamics, and scene bounding boxes. If you have a huge scene, you need to put this up so Max can make the appropriate calculations and roundings. It's precise, but the wrong scene scale starts affecting precision. System units are Max's problem, but Display units are the users problem. Let's say for example I have a soccer field. It's in meters because it's so huge. However the client asked us to add a new bench to the player section and they specifically wanted a 1 and 1/4 inch bevel on the edge of the bench. Doing that bevel in meters is going to be a pain, so the display units are there to allow the artist to change units on the fly based on client needs. The 2nd client wants grooves in mm for some reason... doing that in inches or meters is a pain, so you can change your display units to mm.
Home Grid -> Grid Spacing is purely for display purposes too on the grid. Please let me know if you have any questions.
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Best Regards,