The behavior is, in fact, due to the ScaleMesh option being 'on'. I did not realize before how large the ScaleMesh option allowed the step to be as a function of the current size and the current mesh. It turns out that the step can be as large as the mesh size times the current x size, so your x point can grow exponentially even after the mesh size is capped.
To fix, just set the ScaleMesh option to 'off'.
My colleagues and I will be looking into possibly changing this behavior, or at least documenting it more clearly.
Thanks for your very clear report, and again I apologize for taking so long to give you a definitive answer.
Alan Weiss
MATLAB mathematical toolbox documentation
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