i am glad I found this thread, here I thought it crown authority was broken also. Now I see it works as it was designed, but as other's have said, there is bad logic.
I was playing a game as Ruler of all spain, and had 7 kindgoms as vassals. (using prince and thane mod), and was seeing huge wars breaking out constantly, even under medium crown law.
The problem is that in a land like that, all the kings families and dukes were all intermarrying. So when one duke or count went to war, they would all call allies, and the next thing you know I see basically the entire kindgom at war with each other. I remember one count, of viscaya, declaring war on his duke, and they both called allies, and the next thing you know, the king of portugal is fighting the king of Andalucia.
I think it should be fixed, it doesnt make sense that an emperor or King would allow his kingdom to basically erupt into civil war, and say "well theres nothing i can do about it, they are not my direct vassals". No wars, should mean no wars, period.