I believe it is, just not accurately. It seems to show a very small change in predicted damage when you surround and attack an enemy (or I was hallucinating), but doesn't come close to the actual ridiculously high numbers that are done. I haven't tested it much (ranged troops are still better) but my first guess is the damage prediction doesn't know how to compute negative armor values.

Agreed.

Also, swarm bonus should be countered by opponents swarm bonus.

Thus, if you receive a 3 bonus from having 3 units adjacent to you when you attack, the opponents 2 bonus from having two other units adjacent should counter against your three. 3 minus 2 equals 1. Thus your net swarm bonus should be 1. (numbers are very simple just to get the idea across)