CONGA? I swear I've never seen a better description of that issue, one of the few I have with the game. Perfect.
My impression is that the units are coded to maneuver per typical drill regulations of the era (yes, I have them, no I don't have a life), but the game missed the concept of real estate management as an AI function and left it up to the players, who obviously are not experienced 19th Century field commanders. I see this happen most often when too many units in too small an area try to move, change formation or change facing, the resulting passage of lines, etc, producing that CONGA effect you mention. In reality, a real on the ground officer wouldn't even attempt such nonsense. They would separate the units first to insure enough room was available.
I guess mini-guys might be a little better off here since we are used to rules that restrict unit inter-penetration (although the drill regs did have it; just because it could be done . . .) and if the bases don't fit on the table, whatever you planned to do is cancelled.
CONGA. Love it.