From my understanding, Factions expand to the nearest system with less than 7 factions present first, if not present to a random system.
Where we are based, within 13 LY there is a system with 5 factions and another with 6.
Instead of expanding to one of these systems we expanded to a system 23.3LY away.
The expected order under current understanding is:
- systems with <7 factions, not 'restricted' [1], not previously retreated from, closest first
- systems with <7 factions, not 'restricted' [1], previously retreated from [2], closest first
- systems with 7 factions and a non-native faction not in a conflict, weakest target faction first [3]
So within that expected order I'd say the most likely explanations were:
- the closer systems are ones you've previously retreated from
- the closer systems are permit-locked
If neither of those is true then something more interesting may be going on - whether it's a bug, a sign of an intentional rules change, or a less obvious subtlety is hard to say at this stage.
(I would guess "not bug", though - the expansion rules have a bunch of subtleties to them which have been mistaken for bugs over the years but which turned out to be perfectly logical and consistent rules to handle obscure cases once enough data had been collected - and even today many popular BGS guides don't get the rules right)
[1] A few systems are completely locked to inbound expansion, like the superpower capitals, Shinrarta, and the starter systems. Permit systems are either impossible to expand to or incredibly difficult, the jury is still technically out. Unless you're conducting a research project treat permit systems as also impossible.
[2] Doesn't matter how many times you've previously retreated or when, just whether you have or not. Could have been years ago.
[3] There is some evidence that there may have been a recent rules change on this that means it can't ever target a controlling faction. Inconclusive for now.