I often have this problem with transition folds, there are not too many solutions to give a better appearance to the smoothing but the developed ones are accurate there is no problem! A little trick to mitigate this, is to draw a polygon with lots of sides (40 max I think) instead of the basic circle (don't forget to put radii between the segments). Do the same with half as many sides on the polygons in the corners of the square base sketch). By doing this you simulate almost all folding generators!!!
An additional question to that of élodie, can we put a fold on the 4 edges of the square base! I can't do it without cheating by adding material to my DXF for the laser manufacturer!!!
Which version of SolidWorks are you in? Because in the 2014 version it is possible to use the "broken" option instead of "formed" directly in the transition folds function