There appears to be no fatigue applied on a -10 or less roll on an assessment roll.

Correct, though the Formation automatically converts to a Retreat [RT] status, all cavalry and Irregulars [I] are removed, and all artillery batteries retire, but it doesn't take additional fatigue. During development the determination was made that generally, when a Formation has enough negative modifiers going against it that it can get a -10 or higher as an Assessment result, additional fatigue wasn't necessary.

The strange thing in our case was that the Bavarian division was going to retreat anyway (it already had sustained enough fatigue). So in this case, rolling the worst result was better then the 2nd worst, as he got no more fatigue.

So in this case, rolling the worst result was better then the 2nd worst, as he got no more fatigue.

Sure. We found ourselves trying to strike a balance between how much damage is loaded onto a Formation vs how bad its situation must already be. Compounding this was the fact that we didn't want a Formation to be skirmished or bombarded into Breaking [BK] but did feel there was a point where enough pressure would cause a Retreat [RT] regardless of fatigue.

During development we observed that a -10 might feel anti-climatic, but generally indicated that a Formation was in such a bad situation, it's fate was pretty much sealed.