Yeah, I'm pretty sure it's a bug. Of course, now that I want it to happen it won't, but even earlier today regardless of unit settings to the contrary, Distribute Spacing was stuck on points. When I set general units to inches (or cm, or mm, it doesn't matter), whatever value I enter, and even if I enter the units with the value, it returns a spacing of points, although it doesn't display the units. Switching the units to points and checking the spacing in the Transform panel confirms that the value is correct but the units are invariably points. Repeatedly changing units and activating the spacing button several times (seems to be a random number of times) finally resets the panel so that it delivers the correct units.
No, I have not yet reported the problem through Uservoice, as I thought it might have been related to other glitches I was encountering, and my problem alone, but I think I have cleared up the rest of the issues, and now I see that its not just me.
So to recap, the problem is real, exactly as @Dan Rodney describes, and the units are points, and after a night's sleep and try it again, reporting it if it persists.
Thanks, Peter
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