Nothing is ignored. Moreover, note that there is a difference between the actual value of a number and the way it is displayed.
You can use the format command to change the display of a numbers. It does not affect the actual value (which is always the full precision of a double) and therefore does not affect calculations.
>> p = pi;
>> format shortg
>> format longg
>> format bank
Note that despite the change of display format, the value of p never changes.
Also, 2e-5 is a much better notation than 2*(10^(-5))