Yea, the conversion process acts as a quick way for us to bootstrap and check information before the main execution of SmarterMail when all of our internal systems get kicked on. It always runs and it can even identify new problems with loading domains on an older system. We use it as an opportunity to load each domain and see if it needs to be converted and if it is already converted it checks if it loaded correctly. It generally runs very quickly except on larger (like 2k+ domains large) systems where it takes about 30 seconds to a minute on boot. 15 and 16 did something similar where each domain would get loaded in the beginning, this older process used to take 10-15 minutes on 2k+ systems, now it's mere seconds or a minute in 2k+ cases!

Do you notice any SmarterMail crashes or anything that affects the file system? This is behavior that usually indicates that a settings.json file was either missing or in some cases was corrupt and overwritten with default SM values. Another thing to attempt to narrow down is, it across the board?
There are 3 levels of settings, System, Domain and User, is this affecting all of them? Domains reset to default sizes, User sizes being reset to default levels, etc.

We don't load that file internally, MailService.exe.config, so you should be fine there.