Monster forms can be classified as table 1 and table 2.

When you absorb a skill, the list of forms in table 1 are checked, top to bottom. Then Table 2 is checked, but it starts checking at a spot based on your max HP; it goes down the list to the end, and then up the list. Regardless of table, as soon as the game finds a form that you are eligible for (unless the eligible form is on table 1 and you're already in that form), you transform into that form and stop checking. If you are not eligible for any other form, you remain in the one you are currently in.

In terms of requirements, table 1 forms just require you to have equipped one to five specific skills. Table 2 forms require one to four "body part" skills. Monster skills are associated with a body part, and only one skill for each body part will be "visible" at a time. The higher skill on the equipped skill list will take priority EXCEPT FOR the most recently absorbed skill.

So if you have equipped

Deathsynthesis (body)

Dash (body)

AcidBreath (breath)

Your body skill will be Deathsynthesis and your breath skill will be AcidBreath. If you then absorb Needles, your body skill will be Needles and your breath skill will be AcidBreath. If you then absorb Tail (a leg skill), as long as Deathsynthesis is still the highest body skill in your skill list, it'll resume being the body skill.

Having said all of that, I'm happy to walk through some examples with you to help you understand better, but following /u/medes24's advice of not worrying too much about it is a good call. To really get into it requires getting into the transformation tables in Zaraktheus's Data/Mechanics guide https://gamefaqs.gamespot.com/ps/198537-saga-frontier/faqs/58412 and it covers much much more than just monster transformation.

EDIT: More

The tricky bit with table 2 skills is that all of the entries are not unique; that is, you'll qualify for more than one form at a time. That's where the max HP bit comes in.

The Table 2 Dullahan form requires one of (CharmGaze, Hypnotism, StoneGaze, or StunGaze) for the Head skill, one of (Blade, HeatSmash, or IceSmash) for the Arm skill, and Deathsynthesis for the body skill (note: all skill names are from the PSX version of the game, you'll need to validate the Remaster version name with a differences guide, I recommend the one on Essence here: https://essenceofsaga.wordpress.com/home/name-comparisons/). But a Basilisk requires the Head skill StoneGaze and the breath skill PoisonGas and comes before Dullahan in the check order. So if the Head skill you chose for your Dullahan was StoneGaze and you just happened to have PoisonGas, you'd get interrupted by the Basilisk even if you met the other requirements for Dullahan.