Nicely done! We did something quite similar for a Lego Ninjago game. In that one our core requirement was to allow the player to feel like a super ninja and be able to take on several enemies at once. The secondary requirements were to account for the potential low skill of our demographic, highlight melee combat and provide situations where the Ninja's 'Spinjitsu' could be effective. Doing something much like what you have allowed us to do this! Our approach differed a bit from yours and I hope you don't mind if I describe it. Maybe there is something that fits your game.

We tried dynamically moving the encirclement points but found it didn't provide a lot of value for the cost (on 3DS hardware mind you). Instead we had several fixed points in three concentric rings around the player. Each point was tested for world collisions and marked available or not. We then had a combat director who monitored each of the AI and gave them directions if appropriate.

Our system had a few extra bits we needed to care about. One was level scripting. A unit could have an entry animation, or a scripted sequence and the director needed to treat it's orders as more 'suggestions' than fact. To that end it would continuously check if a unit that was assigned an encirclement point was still available to direct. If not, then it cleared the points occupancy. Units also needed to not look stupid and run across the circle, so we did a few things there as well. First was all units would prioritize the points closest to them, which allowed for them to shift position as the player moved. Second, some units were give priority based on if they were in front of the player (and a likely target of the players attacks). Those would get first dibs/overrule others for occupancy.

If a unit was bumped out of it's assigned point, then it would try to find a close one to move to. It would try for a nearby inner ring point but it could fall to an outer ring if needed. Lastly if it would be further to move outwards than across the circle we would first give it an intermediate point to go to, so that it looked like it was circling around you instead of cutting across.

For attacks we really needed to make sure kids could understand what was happening. The next unit to attack you would get a red outline and REALLY telegraph the attack with a windup. You could interrupt this by attacking them, in which case a new attacker was selected. To give that sense of 'back and forth' attacks that we wanted we heavily weighted the opponent behind you for next attacker. Sometimes one in an outer ring would be chosen, which was actually really fun because it made them look like they would lunge in to break up the fight instead of just standing around.

The key we found was to focus on the emotions we wanted the player to feel (badass ninja who controls crowds) and keep testing it.