Well I've been trying it out and I'm very confused.

The player doesn't seem to be automatically placed in player 1. In fact, I've ended up in the start position 2 slot most often (with any number of players). Setting only a starting position 1 seems to lead to me starting in a random position on the map.

Are there any solid rules written somewhere about this?

It may have something to do with the amount of AI you are adding to the game vs how many starting points you placed. Every single time I do a test, I'm placed at start position 1. Then again, I only have 2 start positions, and I only have 1 AI in the game. I usually use Frogboy's trick of having two islands, so when testing out mods, the AI doesn't get in the way (unless I want it to).