In the KM main menu, under "Keyboard Maestro" is a menu item called "Settings" but when you click on that menu item, the dialog box that appears is called "Preferences." I don't see why the words should be different. Every pane in the "Settings" window is entitled "Preferences: X".
In fact, the documentation is written incorrectly, when it says:
To configure Keyboard Maestro, first launch Keyboard Maestro and choose [Preferences] from the [Keyboard Maestro menu]
It should say "choose Settings" or the menu item should be changed to "Preferences" to match the documentation.
It's just a small discrepancy that wouldn't bother most people. I just want KM to be perfect so I'm a little picky.
I noticed that as well, and believe it was changed with version 11, because I remember it being “Preferences” for as far back as I can remember. Perhaps it was changed to match the newer OS that uses the term “Settings” now instead of “Preferences”. Why the actual window it opens doesn’t say “Settings” however, I have no idea. You‘d have to ask @peternlewis about that.
When Apple changed the System Preferences to System Settings, they also changed all the menus in applications from Preferences to Settings unilaterally.
It could not do that without asking them which version of macOS they were running.
Because I haven't changed it, it's still Preferences in both places right up until Apple decides to change the menu to Settings to lead to the inconsistency.