The "Number of decimals" global setting is ignored for GML 3.2 output. WFS 2.0.0 and WFS 1.1.0 with outputformat=gml32 are both affected.
Steps to reproduce:
Set number of decimals to one.
See six decimals encoded: http://localhost:8080/geoserver/wfs?service=WFS&version=2.0.0&request=GetFeature&typenames=topp:states
GML 3.1 is not affected. For example, see one decimal encoded here (with the above global setting):
Likewise WFS 1.0.0 / GML 2 works properly.