I have 1999 Keith Folke .222 ERA .89 Whip .188 OAV in 106 innings he was used as a holder during that season.

I used him as closer. 1st 5 save opportunities resulted in 5 blown saves and 11.00 era. I took him out of closer role and now after 37 innings has brought era down to 4.20 and has 4 saves out of the setup a role.

Does the sim see the role pitchers are used for and adjust if not used in the role pitcher normally plays?

Nope, it makes no difference what his role was in RL. The only thing that matters is his IP/G... you need to make sure he's not throwing too many pitches per game. But I'd think Foulke is good for 20-25 per outing so I don't think that would have been an issue.

ok thanks, just seemed a bit odd.

Luck.