Tool Palette Changing Block to Unitless. Stop it ACAD!

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So I created a block in a metric template with it's units set to (mm). When I use the standard Insert command in an Imperial drawing (set to inches) It shows the block as (mm) and a conversion factor of 0.0394 (see image 1). Everything is great. My block s in metric but visually looks correct when I insert in an imperial drawing.
When I check the properties of the block I just inserted it shows the Scale as 1 (see image 2). I figure ACAD is doing some behind the scene scaling at this point. So everything is working just fine....
Buuuuut when I insert from the Tool Palette in a new darwing the block is huge untill I finish selecing the insertion point and rotation. Then ACAD scales the block down. When I check properties I find some weird things. The properties of the block show the Scale to be 0.0394 (see image 3). When I use the Insert command I notice that now the "Block Unit" shows Unitless & Factor of 1 (see image 4)
The Tool Palette completely flipped the process here. This is just irritating because I want the Palette to Act like the Insert Command. What am I missing here?