I misspoke earlier and didn't want to leave it hanging out there. The flattening is limited to 3/10 radius rather than 1/10 diameter. No it does not induce bowing, think about that for a moment and it'll become clear. It does induce checking on that face, usually a good thing.

I did find some interesting reading online from the development of that standard.
This article also contains the section properties chart from the standard;
http://www.robpickettandassoc.com/pdfs/C-CS-Log-Structures-Standard-March-06.pdf
This describes the grading standard that was developed for logs;
http://www.structuremag.org/Archives/2006-3/C-CI-Visual-Stress-Grading-March-06.pdf

A couple of reference points might help
Dougfir unsawn- Fb-2050, E-1.6
same #2 sawn round timber beam- Fb- 1400, E-1.6
same #2 B+S 5"x5" and larger timber= Fb-875, E-1.3

It takes roughly a 6-3/4" dia log to get the same "I" as a 6x6 timber..

I talked to a gentleman from a sect that works by hand and does things in the old, and in their mind, better, way. They wanted someone to go on site and erect log homes that they had made in their community. I tried to explain some of this to him. His eyes glazed over and he allowed that they did things the right way. I was eying his round second floor joists. It didn't take a calculator or any statistics. A heel drop on the floor of someones work who does not understand generally suffices.

Hewing of old log home walls here was to allow for plaster and board sheathing later. It was horizontal framing that provided quick shelter. They did not remove the bark from the upper and lower edges even, this does lead to much decay. I've uncovered rotten logs that were subsequently covered by the board sheathing later. They were the same as us, a few understood their work and what they worked with and many didn't care. The work of the worst offenders is long gone.

I think I'll give you folks some much needed time to yourselves.