Legendary does allow teams to play to their custom tactics BUT to a much lesser extent.
I was playing around with sliders again last night and found that, with a pass error of 48, West Ham were more inclined to hit a long ball when the opportunity arose (on Professional they'll do it repeatedly).
It's because World Class and Legendary apply an AI that realises what will and won't work, and playing differently so as to stand a chance, as opposed to "I'm a team that plays long balls and that's what I'm going to do, even if I lose". The proof of that is setting the pass error slider over 65 on Legendary - suddenly ALL the passes are short, possession-based passes, because the AI realises it can't pull off a long pass with that sort of pass error (look at crosses for more evidence of that fact).
I've also found the same with shot error - I reduced shot error initially to 48 (which seems to be a sweet spot, but you can push it down further), and suddenly West Ham scored a beauty from range (off the underside of the bar), as opposed to walking the ball in.
As for World Class - don't bother. It's seriously broken. I've done a lot of experimenting with it last night to make it playable, but it seems to be programmed entirely differently from literally all of the other difficulty levels. It is determined, no matter what the sliders say, to play a fast, short, perfect game, which frustrates me no end. I see no team style coming to the fore on World Class, whereas against West Ham last night on Legendary, it was clear.