I am new to the forum but I have been playing this 41212 narrow diamond system for a long time with FM23(2300 hours) and also with previous editions, so I would like to suggest some of my advices to the system.
Since English is not my first language, if u are reading this and find some wordings are a bit strange, it is not my intention.
Narrowest Formation
41212 narrow diamond is actually one of the narrowest formation in Football Manager. If we look at some similar system like 4312 narrow or 4132 narrow, which still got 3 players in one horiozntal tier ( 3 player in CM tier), the middle CM will push the left and right CM a bit toward the flank to support the flank play. and also in defence those the protection down the flank is a bit better.
Choice of Side Midfieders
However 41212 narrow diamond do not have 3 players in same horizontal tier, which makes CAR and MEZ the almost only suitable role for 41212 system, because both CAR and MEZ are designed by SI to stay wider and support the wingback. If u try to use any other roels other than CAR or MEZ in CM position in 41212 narrow diamond, sometimes u will see absurdly low rating for your wingbacks (6.3 6.2) even if u won the game, unless u have exceptional wingbacks who can detroy the flank by his own, for exceptional I mean Alphso Davies, Achraf Hakimi level.
Also the side midfielders will need to have determination, decision, stamina, workrate, aggresion, bravery and tackling to help the wingback defend the flanks. Find the right players are important for the system.
Choice of Wingbacks
Football manager games are like real life football, one tactic always need someone to provide width and to be the option on the flank, for 41212 narrow diamond, the only player who can provide width to the system is the wingback, therefore for the system to be successful, that makes the option limited to WB and CWB, sometimes FBA can work but definately not FBS and NFB. FBS and FBD and NFB does not go up the pitch high enough in transition.
Despite from the role of WB, the player selection is important. U need a player who is good at almost everything from attack to defend, I will not list everything here but I think u can get my point. One important thing to note is that u need a player with decent jumping reach as well, otherwise u will concede a lot of back post header(sdo not use player like Tariq Lamptey, he might be good in 5 at the back in in 41212 he will be the vulnerability).
Afraid of Quick Counters
Since 41212 narrow diamond really requires WB to get up the pitch, and despite from the CB who can drift wide and protect the space, there will be no one there, therefore the space left by WB going forward will be exploited by some winger system like 4231 433 and maybe 442. If the tactic is not set up reasonable, the tactic lose the ball in transition but wingback already going forward, then opposition winger is getting into space to receive the long ball, it is a concede without looking further to the animation.
Playing style
There are basically 2 playing styles for 41212 narrow diamond.
The whole team get up the pitch and keep high pressure to the enemy, control the ball in middle and WB continuously provide width and drop crosses
Sit in a mid block, launch long balls or quick balls to double strikers to attack
Personaly speaking I prefer the first option, if I would like to play the mid block I can set up a different system that can protect the space much better. But it doesn't neccessary mean from game to game u do not need to do it if u are not managing the greatest club in the world. Against sides like Real Madrid with VInicius, it is important to change WBA to WBS or even WBD to prevent Vinicius get into space(if u do not plan to change formation), and hope they do not score.
Conclusion
I will post my tactic below as the starting point if u want to play 41212 narrow diamond, it is not plug and play though, some in match changes are needed. Also I will post my player selection, Wijndal and Singo as WB, and Rosario and Klassen as side midfielders to see the player selection criteria.
My Tactic