The engine's units are whatever you want want them to be. Wether one unit is a centimeter and your character is 100 units tall, or one unit is a meter and your character is 1 unit tall, in both cases the result will be the same.
Plain numbers in a computer are unitless so you have to decide how to interpret them, i.e. what is their unit.
What's really important here is consistency. Your unit system has to be consistent throughout the whole application. Don't implement a function that works with altitude in meters, another one working with altitude in feet and send a probe to Mars.
In addition, you also want your system to be practical for your context: if you're implementing a game with normal-sized humans using time in seconds and distance in nanometers, you'll work with huge numbers that are impractical for the human brain (and incidentally can lead to problems with floating point numbers).
But the same problem arises if you're working on a game in which the entities are molecules and you choose the meter as a length unit.