Well it would help against a Borg Invasion map boss or the Crystalline Entity,
A few Sunday's back Fleet Alpha Omega sent 20 of our best ships against the Crystalline Entity and we still had no luck in killing the Crystalline Entity, when we finally decided to give up we were sure that Squadron Formations would have helped to keep us coordinated as to who was going where and who was doing what, if you could link Squadron Formations with others lead by members of the same Fleet as you this would help,
Can I also suggest that each Squadron Formation Temporarily gets a different coloured Aura, so that you can at a glance tell the Squadron Formations apart,
It sure looks cool but except the leader who can move around what will the other players in the formation do? Just smash spacebar and use BO skills while enjoy a ride?
At first glance not being in direct control of your flight may not sound fun. But in practice in other space games that had this kind of thing (e&b, freelancer, etc) it greatly enhanced gameplay and situational awareness as a whole because more people had eyes on the bigger picture so it was a lot easier to coordinate.
There were of course times when dropping out was necessary to save your butt from an ill concieved approach by your flight commander. But in the aforementioned games dropping in/out of formation was as easy as simply clicking a button to resume manual control.
So lets say that Squadron Formation command would be captain level rank skill, forming up five ships into this or that formation,
And Fleet Formation command being an Admiral level rank skill, being able to link formations together, so that say four teams of five, or more teams of less members can work together to kill the same target,
One team of five science ships boosting the fleet, while five Cruisers are continually hitting the main target its self, with ten Escorts switching between offensive and defensive tactics might just win against anything in a Fleet Battle,