There is a connection between the amount of blocks within a formation that an army would assign units to that also determines whether the formation will be used. This can have quite a big effect. eg I tried a custom formation set at priority 2.0 and had to up the phalanx formation to 3.2 to get it to be chosen! Depending on types of units sometimes this had to be increased to 3.4 to get it to be used.

Not sure if the block connection is a percentage weighting (to the priority) or some other calculation. The increase to 3.4 occurred when the army could fill 13 of 15 blocks (excuding a dummy Block) compared with 11 of 15.