Point inside polygon with tolerance using ellipses as edges

PointInsidePolygon.cs

public static bool Inside(IList<Vector2> polygon, Vector2 position, bool toleranceOnOutside = true)
{
    Vector2 point = position;

    const float epsilon = 0.5f;

    bool inside = false;

    // Must have 3 or more edges
    if (polygon.Count < 3) return false;

    Vector2 oldPoint = polygon[polygon.Count - 1];
    float oldSqDist = Vector2.DistanceSquared(oldPoint, point);

    for (int i = 0; i < polygon.Count; i++)
    {
        Vector2 newPoint = polygon[i];
        float newSqDist = Vector2.DistanceSquared(newPoint, point);

        if (oldSqDist + newSqDist + 2.0f * System.Math.Sqrt(oldSqDist * newSqDist) - Vector2.DistanceSquared(newPoint, oldPoint) < epsilon)
            return toleranceOnOutside;

        Vector2 left;
        Vector2 right;
        if (newPoint.X > oldPoint.X)
        {
            left = oldPoint;
            right = newPoint;
        }
        else
        {
            left = newPoint;
            right = oldPoint;
        }

        if (left.X < point.X && point.X <= right.X && (point.Y - left.Y) * (right.X - left.X) < (right.Y - left.Y) * (point.X - left.X))
            inside = !inside;

        oldPoint = newPoint;
        oldSqDist = newSqDist;
    }

    return inside;
}