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Is it that no one really knows how MLEs work yet, or that they're not working in practice like they should?
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They're not working like you would think if you read the Game Guide.
It sounds like they're working as they were programmed to however, judging by montoya's comments, along with Markus' (brief) response in a thread in technical questions.
It is entirely possible to set up a huge (or small) universe using MLEs, although it seems better to use PCMs for more precise manipulations. I've found you'll need to mess with league totals more with the PCM method, though. MLEs seem most applicable in the initial creation for leagues with minors.