I would also recommand to set a negative inital layer horizontal expansion. As you noticed it the first layer is squish on the print bed that you cannot get accurate printed geometry. On my S5 I need -0,25mm for initial layer and 0,1mm for all the other layers so my prints can match the CAD geometry size.
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Smithy 1,146
I think this could be the reason. If you really need such small things or holes that are in the neigborhood then you should consider to buy the AA 0.25 core for the S3 as well.
But give it a try and print the same model on the UM2 with the 0,4 nozzle.
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