"Optimize contours" causes distortion

I have several hundred of these types of glyphs:

When I optimize contours, I get this:

Do I need to optimize? If so, is there a way to do so that doesn’t cause distortion? Thanks.

To get a near perfect circle you need only 12 nodes. Optimising an already optimised contour may make it worse, so don’t do it.
Perfect Circle.png

I had drawn these as constrained circles originally, so I’m not sure how it happened. Maybe because I rotated it?

Is it ok to leave it alone? What are those little red circles?

Probably intersecting contours or suspicious points. What does the Validation Toolbar (F7) tell you? Double-click the error report to zoom in and manually fix the errors.