You do realize there's a middle ground between ahistorical title never forming and always forming, right?
I haven't seen Badajoz/Lusitania "always" forming. In fact, I wasn't even aware it was a possibility until I looked it up on the wiki, since I've *never* seen it.
If you're seeing it "always" form, then something very different is happening in our games.
Oh please. Strawman me more why don't you. I like non-historical things happening in the game. Saying I would *like* to see something happen more often is not saying I want everything to turn out exactly like reality 100% of the time. I don't particularly care if most things mirror reality exactly. This bothers me in particular because I've been stuck as a kingdom wanting to form Portugal because it would be more fun to me than being Lusitania, but I haven't been able to because I need to be a duke and I can't demote myself. As it is I hardly ever see any titular kingdoms form in Iberia at all. Their existence should bring about *more* diversity in outcomes, but it doesn't. There is room for outcomes that aren't just 100% loopy alt-hist where many historical outcomes are extremely rare and 100% exactly what happened in reality.
Do you want more possible outcomes or not?
If you want more possible outcomes, then Badajoz/Lusitania is a *good* thing. It gives different chain of options for what kingdoms can rise in the peninsula.
Forming Badajoz/Lusitania isn't "100% loopy" at all. It's a very plausible outcome, and a very plausible alternate kingdom to arise out of the situation in Hispania.
I'd also suggest that one of your reasons for not seeing many titular kingdoms arise in Hispania is that there aren't many of them, since most are de jure at the usual starts.
If anything, the forming of the Kingdom of Portugal was the "loopy" and unexpected thing. It came more or less out of nowhere, and with very little precedent for its existence - and with the land being at least nominally claimed by other existing Spanish kingdoms. "Hey, I've taken the southern half of your kingdom, and I'm going to make myself king in it now. KTHX BYE"