Okay.. after another half-day of experimentation with World Builder and different game setup configurations, I think I have discovered something else about our barbarian situation that has me pretty hopeful about a solution.
The pivotal moment came when I decided to make a huge map with designated starting points for each player. Raging barbarians was selected as an option. As usual, I used 18 city-states and 18 civilizations.. but this time, I decided to place the city-states on Teams 1 through 18, with the civilizations being placed on Teams 19 through 36. When I began the game, barbarians wouldn't spawn, as usual, but I noticed on the score list on the right side of the screen that there was a unique entry for Team #22.
So I went back into World Builder, added a Team #37 (the same civilization as Team #22) - and then erased Team #22. There was no longer a Team #22 in the game. (While there, I also gave myself just enough culture so that I could immediately adopt the barbarian-revealing Honor policy on Turn 1, and then gave myself a starting unit with ultra-vision and hovering status so that he could climb up a mountain to reveal a huge chunk of the map before returning to level ground).
When I began the next attempt, I could see that there was no longer an odd designation/indentation for Team #22 on the score list. On Turn #1, I have my uber-vision unit climb up and down a mountain to reveal a huge chunk of the map. On Turn #2, the honor policy showed that a handful of barbarians generated around the revealed areas of the map. On Turns #3 and thereon, more barbarians generated. Success!?
I have since replicated this success with several maps, with and without various mods enabled. We might be remarkably close to this being a decent workaround for the issue. It would allow placement of each player on the map, separate teams for everyone so that normal diplomatic gameplay is restored, full barbarian generation, etc.. but I'd like to see some folks from the forums try to duplicate the results on their own.
Here's hoping that this helps.. cheers.