Are you guys checking the player origin settings on the Players tab of league setup? I might be missing something, but this is working for me with a custom world db.
If you set the League's Region and then go to the Players tab and click the Edit button for Default Player origin you should only have countries from the League Region available to select. The same applies to the amateur draft pool.
Regional draft rounds don't work for the inaugural draft (not sure if this is by design), but they work properly for the amateur draft.
I just tried adding leagues to an existing game and it works. Both by doing an inaugural draft or by delaying player creation and filling teams with fictional players
