I must admit I have been wondering about this as well.
I am not sure that you can jump from the idea that every division on the map is its own unit to that there is no stacking of units but ........
The stacking of units does seem to cause problems when you look at the ideas about combat width and frontage.
I see the size of the front line as a real barrier in combat, if you cant fit your divisions in the front line they wont engage with the enemy.
It has been stated that a Corps commander increases the chance of a reserve joining combat that seems to suggest to me that if a single division is forced to retreat from the front line a Corps can somehow replace this division with one of its own.
That causes a problem for me when I try to visualize the front line as a fixed length, 2 divs cannot replace 1 div if theres only room for one
But this may be the case, once a Corps is formed it will act as one unit with a total combat width equal to the amount of divisions\brigades that it has, it will need a commander and at least two divisional commanders it will have a better chance of operating as a reserve but only if there is room on the front line.
As you proceed up the command structure forming Corps and Armies each level adds value to your overall abilities but you also need commanders for each level.
It seems to me you could form an army out of one division something you would never do because you would be wasting 3 commanders but it could be possible.
Alternatively you could form an army out of 100 Corps but your first attack would fail because the combat width of that army would be too big for any front line.
Firstly, my guess is that around 6 frontage slots will be available for fairly open ground. I make that assumption on the basis that if a province is around 30km then I would expect IRL for 1 to 3 INF Divs to defend it. A single INF Div would be very stretched across that area, but there were occasions where on quiet parts of a Eastern Front such an area might have been covered by only one Div. However, about 2 would be the norm, but occasionally on important fronts there would be about 3. If we assume Paradox will agree that 3 INF Divs on clear terrain is possible, and that an average INF Div will have two Inf.Bde (each with 1 frontage slot) then we get a total of 6 frontage slots.
But to help visualize how this should all work, let's instead look at much more difficult terrain - mountains. Here we can easily imagine that even if the province is 30km wide, that most of this area is virtually impassable, and there might only be 2 frontage slots. You can visualize this as a single INF Div with 2 Inf.Bde defending a single narrow pass through the mountains.
Put two independent INF Div in that mountainous province: call them 1st and 2nd Mountain Div. If combat takes place 1st MTN occupies the frontline, while 2nd MTN is in reserve several km behind them. There is just not enough space in the narrow mountain pass for both Divs to deploy alongside each other.
The attackers throw in several waves of well-equipped and well-led forces against 1st MTN and eventually after several days of combat it cracks, it's Org. drops to 0%, and it retreats from the province. At this stage, the attackers have breached the frontline, but they have not yet won the battle. There is a chance that the Maj.Gen. commanding 2nd MTN will organise his men to form a second defensive line. Let's just guess that this is 70%. Perhaps it will be dependent on his skill level/traits, and doctrines, which will affect how able the Maj.Gen of 2nd MTN is in recognising the danger of 1st MTN cracking and getting his men into a good defensive position.
If 2nd MTN take up position on the frontline, then they are able to hold-up the attackers for several more days. If they don't take up a good position quick enough, then the attackers make a complete breakthrough, and the 2nd MTN also has to retreat from the province, even though they are still at full Org.
Now let's play-out the same battle again, but organise the two Divs into a Corps formation. Whatever the mechanism for doing this we end-up with I Mountain Corps with a Lt.Gen commanding. I prefer the idea that there will be a Corps HQ unit formed with the Lt.Gen, and this will be positioned just to the rear of the two M.Divs in the adjoining province, but that is still not confirmed.
Anyway, 1st MTN is in the frontline and it has been attacked for several days. As it's Org. drops towards 0% the Lt.Gen Corps commander becomes concerned that it will soon crack. He orders the Maj.Gen commanding 2nd MTN to move forward and relieve 1st MTN in the frontline. Now the chances of this happening are much higher. Let's just guess at 90%. It is not entirely dependent on the initiative of the 2nd MTN's Maj.Gen. Instead, it is dependent on the skills/traits and doctrines of the Lt.Gen commander of I Mountain Corps. An average Corps commander would still give a higher chance of 2nd MTN getting into position, than not having a Corps formation. This is because that is his job, to ensure that the Divs are able to support each other.
In addition, there might be other benefits of having a Corps formation. This is entire speculation on my part, but it seems reasonable that if the Lt.Gen pulls 1st MTN out of the frontline before their Org. reaches 0% they may not have to retreat from the province. They go into reserve in the same province a few km behind 2nd MTN. They can regain some Org. and then be available to be put back into the frontline later, if 2nd MTN can hold-out for any length of time.
Since this takes place entirely with the combat system, within a single province, IMO this will all take place completely under the control of the AI. You will be able to see which Div is in the frontline, which is in reserve, whether an event takes place for the 2nd MTN to take over the frontline, etc. only within the combat screen. You will not be able to affect this directly.
Now, let's play-out again. Let's have the same 2 Divs in the province organised into I Mountain Corps with a Lt.Gen, but give the Corps a third Div: 3rd MTN. This is not in the province where the combat is taking place. Instead, it is in tactical reserve, in the adjoining province where the Corps HQ is located.
If you are micro-managing the units in this Corps, and you can see that 1st and 2nd MTN might struggle to defend the province, then you can give 3rd MTN an order to move into the frontline province and help the defense. Once it completes it's forward move, it will join the combat, but as a further reserve unit. Now, because there are two different Divs in reserve in the province, the chances that one of them will be able to take up a densive position as the new frontline, will be higher than if there was just one. Let's just guess that this might be 95%.
But if the Corps is under AI control, and you have given the Lt.Gen an order to defend this mountain province, then I would expect the Lt.Gen commanding I Mountain Corps to give the order to 3rd MTN to move forward and join the combat, without you having to micro-manage the situation.