Is the formula "only" looking out 4 parsecs for owners? The T5 rules call for the highest Importance world within 6 parsecs.
So Tiamat (Canopus 2404) and Valence (Canopus 2202) currently have Castine (Canopus 2007) as their owner, which is 5 and 6 parsecs away. But the formula only recommends the less-Important Tanqueray (Canopus 2103) and Baxter Station (Canopus 2407) or Klimovsk (Canopus 2001).
That said, I really think 6 parsecs is too far and 4 seems a much more reasonable limit.
Like I said "nearby" is a vague term.
Warning: long-ish technical explanation
The trade map generator uses a graph for the base data structure. A graph (in the computer science data structure sense) consists of a set of nodes and edges.
For the trade map generator, each world on the map is a node. In the graph the edges connect the nodes together, representing possible paths between nodes. In the setup for the trade generator, the system generates an edge between every pair of worlds within a maximum jump distance. For the generator, the default maximum is 4 parsecs, and I usually run it with a maximum of 5 parsecs.
As part of each edge I track it distance (in parsecs), the Bilateral Trade Number (BTN) between the two worlds, and a weight for the route.
To actually generate the trade routes, the system uses a route finding algorithm called A*. The process generates a route between (almost) every pair of worlds on the map following the edges between the intermediate worlds.
The A* Route finder is very efficient, but if you give it too many options for possible routes it takes much longer to process. So as an optimization I remove some of the edges. In this case I remove the longer (J-5 first, then J-4, and so on) and the lower BTN routes first for each distance.
The generator sets a maximum of 20 and a minimum of 10 routes for each system. So depending upon local stellar density the maximum distance averages between J-3 to J-4. For lower density areas, it may include one or two J-5 links. For really high density areas it may only include the J-2 links.
The owned worlds report just checks the set of edges from a given (owned) world to find potential owning worlds. So yes, it checks some or most of the worlds within J-3 or J-4 for potential matches.
When I explained this to Don as I was developing it, he was fine with it's limitations. It was a 90% solution, meant to resolve the mostly boring cases, and letting him work on the more interesting (i.e. exceptional) ones. He specifically requested the list to allow selection of an interesting case. I know I wasn't aware, and I'm not sure Don was either, of the T5 rule for owned worlds.
The Owner is the Most Important, Highest Population, Highest TL world within 6 hexes
I can do this as a option if you would like. It will take me a day or so to write and test the processing loop.