When a scale bar is used, there is no coordinate system to worry about. However, when axes points are used there are two coordinates involved.
Engauge Digitizer assumes that the two coordinates are linear and cartesian (linear X and Y). This assumption is the default since most graphs follow this behavior.
The coordinates dialog is used to select other coordinate systems. The coordinates may be polar (Angle and Radius) rather than cartesian. The coordinates may also be logarithmic rather than linear.
The polar angle units are degrees by default. They may also be changed to gradians or radians.
The coordinate system settings for a cartesian graph with linear X values, and logarithmic Y values, are shown below: