I think Italy not forming has to do with GPs getting the small Italian states in their SoI. That in itself kind of decreases the likelihood of one of them getting stronger and uniting Italy. But the main problem I see is that usually at least 2 or more end up in the same SoI, and thus cannot declare war against each other and everything remains fragmented.
italy form often in our working version of 1.2 now after we did some changes.
the issue with United States of Central American I'm not sure is fixed. it might be, I know someone at the office has been looking at the problem.
we are looking at american civil war. also CSA gets some more leadership etc now to make them less of a pushover.
strange about not seeing germany form as I have that happen in many games