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I was playing a game last night and my opponent had brought some Pink horrors in his list. I killed a few of his horrors and he proceeded to set up the split horrors across the board to camp an objective. I had a look at the rules with him, and it didn't appear that anything forced him to put the horrors within unit coherency (the only restriction on split was 1" away from enemy models), but it just doesn't seem right to me.

Dakka, any thoughts? Was there something that we over looked?

Yeah you overlooked the don't be a rule.

On a serious note this from the FAQ should cover it, you are not setting up a whole unit but you are setting up part of a unit so it is close enough for me.

FAQ wrote:Q. Can I set up a unit, or finish any sort of move with a unit,
so that its models form several separate groups (where each
group consists of models from that unit that are within 2"
horizontally and 6" vertically of at least one other model from
their group)?
A. No. The unit must set up or finish any sort of move as
a single group.

Fromt he rulebook faq

Q. Some rules allow me to add models to a unit during the
battle (e.g. the Poxwalker’s Curse of the Walking Pox ability).
Where are those models set up?
A. Unless otherwise stated, these new models are placed
anywhere that is more than 1" from any enemy model
and still within unit coherency of a model in its own unit
that was itself on the battlefield at the start of the phase
in which the new model was created. Note that if you
cannot set up a new model on the battlefield because
there is no room, it is simply not set up