You don't even have to rule multiple kingdoms; you merely have to have vassals within the border of a de jure kingdom other than yours.
I think this is the issue. I generally rule multiple Kingdoms and saw several times Medium Authority vassals duking it out. (That I generally mind. They're so cute with their sweet little wars with 300 guys, awww...)
Initially I thought High Authority fixed it. But the real deal is probably that by the time I moved their kingdoms to high, I had moved other kingdoms where they also have assets to Medium...
And of course, only the person DoWing needs ONE holding in a Auto/Limited kingdom (de jure) to be able to DoW freely. Worse! If they have an holding outside your de facto borders which is in a kingdom thats de jure less than medium, then they can DoW in your Absolute authority kingdom. Sometimes its not obvious at all because they just have a barony in Italy or something.
Bottom line, its not working perfectly right. BUT if you keep all your kingdoms above medium and carefully monitor your vassals for holdings outside your realm, itll usually be pretty much OK.
Complicating the issue are kingdoms located partly or in full within Empires. Imperial laws take precedence over local Kingdoms but they dont seem to apply correctly when it comes to this. An Absolute Authority empire doesnt seem to apply correctly to King-level vassals. A King of Bohemia doesnt get to set his own laws because it says 'imperial law applies' but in practice, the laws that govern the king of Bohemia dont neccessarily match Imperial law. This can apply to other kingdoms in Byzantium, or if you mod HRE borders to include Italy and Burgundy as I have, to those as well.
In short, its glitchy and needs more testing. I'm giving feedback based on user experience but its not QA-level because I have focused more on workarounds than analysis of root causes. I do the latter 8 hours a day @ work, when it comes to my entertainment, I go for the cheap fix
