Delocalization error in approximate DFT clearly manifests itself in homodimer cation systems (like H2+ or (H2O)2+), with GGA functionals typically leading to large energy errors and qualitatively incorrect structures. It also causes problems in a variety of other chemically important contexts.
We have found that the delocalization error in densities can cause major errors in WF-in-DFT embedding – these errors are not particular to the projector-based scheme we use,but simple expose a limitation of partitioning systems based on the electron density when that electron density is qualitatively flawed.
Following work from Kieron Burke, we have found the simple expedient of using Hartree-Fock densities in WF-in-DFT calculations really improves reliability in cases where there is a serious delocalization error, and doesn’t cause major problems (in the examples we have studied) when there is not a big delocalization error.
You can read about this work in a paper that has just appeared online: Pennifold et al., ‘Correcting density-driven errors in projection-based embedding’, J. Chem. Phys. 146, 084113 (2017); DOI: 10.1063/1.4974929.