qwerty42 is perfectly right !
If you want use an area.kml with AFS2 grid system you should choose Area snap: off
In FSEarthTiles snapping option could be setup in "Area snap" option.
LatLong: snap the bounding box on "one minute" unit of Lat/long degree.
LOD 13: LOD correspond to the specific grid system of old Microsoft Fight Simulator, LOD13 is level used for one square of Autogen file (.agn)
Tiles: I think that it correspond to specific pixel width and height of one tile used by google, Virtual Earth, etc...