A Formation Fighter is used to fighting alongside his brothers-in-arms in very dense formations; unless they're a Bad Formation Fighter, anyway. A square's maximum amount of Size points is adjusted by the lowest Formation Fighter value in its square. For reference, units without this trait are assumed to have a Formation Fighter value of zero, so even one of them in the square holds the amount of Size points a square can handle at 10; unless a Bad Formation Fighter is present, of course.
The maximum number of units a square can have is 10.
This is the "Bad Formation Fighter" icon, by the way.