With Shift key pressed while selecting the second segment with the FILLET command 0 radius will always be used no matter what FILLETRAD is set to. Easy peasy.
When the _Fillet comand prompts you to select entities, the code has completely finished, and therefore the variables have already been reset.
Try changing:
(COMMAND "FILLET" "T" "T")
To:
(COMMAND "FILLET" "T" "T" pause pause)
You should also verify if the cmdecho should actually be ON for that part of the code.