Again, the option that you have on the screeshot above does the calculations like this:
You have 10,000, then with the setting of 10(%) the lot size will be exactly 0.01, not 0.03, not 2. 10% of 10,000 is 1000, which turned into lots equals to 0.01, at least on EURUSD and similar There is no margin stuff here. Yes, if the calculated value is too low, the lowest possible is taken, and if it's too high, the highest possible is taken.