I had never seen a confederation in any of my play throughs. There was always one who was willing to confederate under me but I would leave them and the AI never even attempted it.
For example on my current save as Achillies before this patch the Beoetians wanted to confederate with me but wouldn't join any of my wars and so I was considering finally doing it because for once it seemed like the confederation would be of better value to me.
I left it as it was and didn't pick it back up until the Amazons launch and new update. Now the Beoetians are very against a confederation but payed me to join all my wars.
In one end turn sequence Aeneas confederated Hector and Paris and Odysseus confederated Agamemnon. To me this is ridiculous- the factions in this game and the stories it is based on don't lend itself at all to confederations, military allies and vassals should be as far as it is goes. Freaking Agamemnon getting absorbed by Odysseus and both princes of Troy going to Aeneas are probably the worst possible choices for being allowed to be taken over by someone else.
So my issue is that these confederations should be removed from this specific total war title or only minor factions should be confederated- which as I said before is still pushing it as every faction in this game serves a purpose within the story it is based on and military allies/ vassalization serves the confederation role just fine. A side issue is that when a confederation does happen there is no announcement. I click through a bunch of stuff about agents and then have to notice myself on the map that suddenly mass amounts of factions are gone later finding their legendary lords as generals flying other banners.