st_envelope on points

Hello all

We are trying to populate a polygon st_geometry layer with envelopes from a few other layers.
Using something like this:
insert into polyLayer (objectid,shape) values (1,(select sde.st_envelope(shape)from pointLayer) );
The docs say that the tolerance will be used to create a valid envelope.
It looks like the created envelope is smaller than the tolerance (we use meter coordinate system with 0.001 tolerance).
The result layer cannot be edit and have a few other problems but it can be drown without errors.
Is anybody out there is doing any similar process?

Thanks
Mody