As a little addition to Uhrwerk's words, in A7 (at least 3 years ago but I don't think this has changed) the collision detection on big models could fail with the POLYGON flag set with the small default bounding box. I once had a platform, sth like 768-1024 quants long (player height = 90 quants), where the player could fall through the right 3rd of the entity, until jcl explained to me that I would have to adjust the bounding box (i.e. call c_setminmax) of the entity too.
I assume the collision engine works like this that it grabs the non-passable entities from the/ a (ABT?) tree, checks for possible bounding box-box collisions with a little buffer and only then executes box-polygonal collision detection.