It seems its intended to work after you Triangulate your entire mesh then Quadrangulate all, much like a retopo thing. Not sure if its a bug or intended to work this way. With Max it works on individual faces.
It certainly won't work with geometry that wasn't previously perfectly quaded. Even then it tries to remove the longest edge which is usually the diagonal line that was added by triangulation, but that isn't always the case so it usually screws up more than it gets it right.
I wish there was a way to plot guide lines or tell it what a dominate edge or ring should be. Similar to how you can guide zBrush unwrapping.
It's more of the opposite action of triangulate rather than "take this nsided face and fix it" kind of thing. Like if you import a triangulated mesh from a game engine, you would use quadrangulate. But even then it's a slave to vertex order and it can quad things the wrong way.
Replies
I wish there was a way to plot guide lines or tell it what a dominate edge or ring should be. Similar to how you can guide zBrush unwrapping.