If you are only ever running one ASP.NET application on a website this is not an issue. However, if you are running a site which may have an application at the root and other separate applications running in sub or virtual directories, then Settings inheritance could be a problem.
You can read more about how config files get inherited on msdn but here's a tip for stopping settings in the root app from getting inherited. The
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Other Notes:
Although I think the inheritance is in general a good feature to have, especially for inheriting down things such as security settings. It can even support locking certain settings for child applications, but things can be problematic if the child application doesn't share the same libraries, modules, handlers, masterpages or themes.
Most collections in the web.config have the
http://dotnetslackers.com/Security/re-55457_Stopping_ASP_NET_web_config_inheritance.aspx