Alright, let me just explain quickly what this does wink
This distance just slowly cuts out the ambience, it does not make a HUGE difference, but if for example you play staccato notes with percussions, you will hear that the trail gets smaller and smaller as you set the value to the minimum. It is very hard to hear the difference only with sustained chords.
The crackling you hear is the IR change when you move the knob and i'm afraid there is no way around that, but it does make a difference, it's just subtle.
There is one thing that might cause you to not hear this, if you reopen the same session as before, it will simply not work as the UVI Workstation preset is being recalled and the new effect is not there, so just create a new session or re-instanciate UVI Workstation or try this in standalone and you should hear it wink

Thanks steve for the report... damn copy paste wink It will be changed in the next version when we also add the sustain pedal control (a few users have been asking for it).

And sorry jmolino... moving the mics would mean redoing many graphic things...