While working with calendars you most certainly must have come across this options menu. This is like a settings box, not a calculation box. The calendar works independent of this small box. As the description says, you have to ‘specify the number of work hours for EACH TIME PERIOD’ …. a time period could be a day, a week, a month, … These are the values that will be used as conversion factors when you choose to display time units and duration in units other than hours. e.g. in the calendar you may have specified the hours per day as 9…. So when you enter 1d as activity duration this info will be stored as 9h in the application. Similarly, from the above image, if you enter 1w as duration, it will be stored as 40h (not as 9 x 5 = 45h).
The actual calendar only shows the working hours in a day according to what’s fed into it by the user. So if your calendar settings show 8 hours in a day but your Hours per Time Period settings show 9 hours per day that means a 1d activity will take 1 full day from the calendar (say 8 am to 5 pm with 1 hour break) and another hour (8 am to 9 am) from the NEXT day.