The movement speed while in formation is fine, it is the time it takes units to get into formation in the first place that is the problem, and also when they get pushed out of formation by terrain like cliffs.
I would recommend a system where the movement speed bonus is only applied while the group of units are getting into formation, or getting back into formation after being dislodged by terrain, and only to the units that are not currently in position in the forming formation. Then, once in formation, it goes back to the standard of the entire formation only moving as fast as the slowest unit. This would fix the biggest issue with formations, in that they take so long to form.
One method to prevent unintended abuse is that a cooldown could be applied to each unit for this movement speed buff, where they cannot receive it for 1 minute after previously getting buffed.
I know it would be a lot more complicated to implement properly, especially making sure that it can't be abused as people can be very creative, for example the commander may need to be excluded from this formation buff, but I am just giving my thoughts and ideas that attempt to satisfy both the wants and concerns of both sides of the conversation I have seen here.
Reading through this: https://github.com/FAForever/fa/pull/5908 it seems like a lot of the issues are down to path finding, but I still think a system of movement speed buffs while getting into formation would help regardless of whether these path finding issues are fixed.