In a part 91 formation flight within a mode C veil, are all the aircraft required to have their transponders on?
The way 91.215 is written, you must operate your mode C transponder in rule airspace unless ATC tells you not to.

The reason ATC tells you not to squawk in the case of a formation flight is to avoid triggering a constant stream of Collision Alerts between members of the formation, which is useless, annoying and may distract them from an actual problem elsewhere.

However, the CA is suppressed if all the aircraft involved are squawking 1200 (VFR) because there's no point warning the controller about a possible collision between multiple aircraft they're not talking to.