I suppose my question is obvious from the topic name.

To describe my "problem" further: I'm currently on the trojan rabbit objective (tier 3). As formation abilities are blocked, I wanted to use the crusaders with best gear effects. While moving around Sjin I realised that there's no change to any crusaders DPS even though his legendary hat increases DPS of crusaders next to him (so it should change if Sjin is adjacent to anyone or not).

So back to my question: Are legendary effects considered as formation abilities? If yes, what about the "normal" gear effect? Do they work in this objective?

If the effect is something like "Increases global DPS" or "Increases the DPS of female crusaders", then yes, it is treated as a formation ability. However, abilities such as "Increases the effect of ___" are NOT formation abilities since they are buffs unique to the crusaders that have them. Same with things like Golda Panda's legendary Clover effect which boosts gold found when not under attack. Since the effect does not affect ANOTHER crusader, it is not counted as a formation ability.

Although, in reference to the objective you mentioned, the "gold find" effect mentioned above would probably be blocked as it does affect the formation overall, even though it doesn't affect crusaders specifically.

GEAR EFFECTS are pretty much never considered formation abilities, so a crusader with a normal gear effect of "increases global DPS" or "increases gold find" would not be disabled, but the legendary effects on those gear may be disabled.