So if i get this right, the instrument settings within the effects column like tremolo or vibrato are reset when there's an instrument number.
Instrument settings don't appear in any column, they are values set in the instrument editor. They dictate the default volume, panning, finetuning and relative note of a sample. They are essentially sample settings but they are called instrument settings because they are located in the instrument editor. An instrument can have 16 samples mapped across the 8 octave range. Each sample can have unique instrument settings and these settings can be overridden and modified over time with effect commands on the pattern.
So for example, if you play a note with a sample that has panning set to 40 (halfway between the left and center) and after that you use effect commands to pan the note towards right, the second you play another note with the instrument number in place, the panning will be at 40 again. But if you left the number out (and providing the volume hasn't faded out), the new note would in the same panning position where your effect commands left it. This is what I mean with instrument numbers resetting the instrument settings.
The rest of the instrument settings are ones that actually operate on the instrument level, i.e. they are shared between all samples of an instrument. These are the volume and panning envelopes, the fadeout value and the auto-vibrato settings.
There is no auto-tremolo but if an instrument is auto-vibrating with a sweep (i.e. vibrato depth increases over time), an instrument number resets the sweep and it will repeat like when the note was originally triggered.
But effects occurring already, cause the sample not to be able to be switched with another sample while effects try to continue on the "new sample". In which case the instrument settings would still be reset right?
It's simply a limitation of Fasttracker II, that switching an instrument number on a playing note doesn't change the instrument or sample. It just acts as if the new number was the same as the last one and what happens is the equivalent of playing a new note without restarting the sample. Now, in ProTracker 2.x mode you can do interesting things but man, I'm not going into that now.
It's good that you ask questions. It's just a little exhausting to answer them as I'm trying to figure out the ideas you are presenting and where to intercept that train of thought. What I'm trying to do now is stop wasting energy on that and lay down facts and hope it'll make sense to you. Eventually, at least.