I don't really understand the concern about running too many candidates. This isn't FPTP, vote splitting doesn't really exist. Perhaps the concern is wasting resources on multiple candidates targeting the same voters when a single candidate could focus on swing voters.
There have been examples where running too many candidates has gone wrong. See the SDLP in West Tyrone in the 2007 Northern Ireland Assembly election: they had three candidates who got just over a quota between them, but transfers leaked away and they failed to get a seat. Of course it's possible that if they'd only had one candidate they'd have got significantly fewer first preferences and so lost anyway, but I doubt it.
If people have well-behaved preferences (i.e. adding or removing an option does not change their ordinal rankings of other options), this should rarely matter (STV fails
independence of irrelevant alternatives, although in practice it's almost always too hard to strategically nominate around this). Someone who ranks FF(1)>FG>FF(2) would simply vote FG>FF(2) if FF(1) did not run. Now, as Lewis Trondheim says, people may not in fact have well-behaved preferences.
