Interesting, I think the problem of faction is in fact they fire to early. In my games the fire often from 100-150% but this is way to early. They can easily be beaten. Mostly because I can still field more man (sometime I wonder what this 100% means) and I can buy mercs and have allies. They need to fire much later, e.g. 200% to have a little chance.
The Faction power is the totaly number of troops of all faction members vs your total number of troops. So at 200% Faction power the Faction members have you at a 2:1 disadvantage. Except that the following now applies:
Really, the problem is that they're treated as realms instead of alliances now, with the faction leader as "king" and everybody else his vassals. They get an opinion buff from being the faction leader for as long as the war lasts so their vassal levies are higher, but they still rarely come close to matching their opponent. If the faction members got the full benefit of their combined armies they'd be a lot more destructive.
I would estimate most factions get 40% of the advertised Faction Power, in addition to levy laws and the fact that "100%" of a vassal's levies isn't 100% of their actual troops the Faction Leader also doesn't get access to the retinues of Faction members, nor does he get as much income as the liege because he has a smaller demesne.
On top of all that revolts actually favour the old system of Allied revolters over a big faction because the allies would often go to siege multiple targets which the liege then had to rush around and un-siege. This tended to wear down your levies so that by the time you faced a large revolter army you were in worse shape than they were.
It was "Death by a Thousand Cuts" but with the Faction System you usually get one climactic battle and the liege
(player) has the bigger retinue and more core demesne troops, so he's liable to win.
Revolts also used to "snowball" where you could be chasing a revolter around the map only for a "loyal" vassal to get fed up and agree to join the revolt, suddenly you're down another 700 men and the enemy are up 1500 men.
If the player is ahistorically blobbing, it's perfectly fine for the AI to ahistorically ally.
Likewise, if you're Byzantium and you conquer parts of Anatolia back from the Turks, then it makes perfect sense for the small Christian states in the Balkans to form a pact.
If I had been a-historically blobbing and it had been Christians in the Middle East or the Pontic Steppe forming a Defensive Pact you might have had a point. However, I re-took Sicily, one county in Italy, Krete, Asia Minor, Tripoli and about four more provinces, all in Holy Wars. Historically speaking that's the Byzantine Empire "having a good five years" and well within the bounds of the sort of thing Emperors did historically.
It's not a-historical blobbing.
In any case, the major Pact members after that were Catholic Italy and Orthodox Bulgaria, neither of which was really threatened by my Conquests, but now suddenly willing to fight be to prevent the re-capture of Antioch or Jerusalem.
That is, bluntly, just nuts. No Christian Prince in the 9th Century would have considered telling the Byzantine Emperor "Hey, lay off those poor Muslims occupying the Holy Land". No, it would be more along the lines of "Ave Imperator, can I marry your daughter?"