MySQL InnoDB Plugin default engine type not accepting config setting
I have finally found the answer, and it was [unsurprisingly] staring me in the face the whole time...

I had inherited the system from an earlier admin, who had made a mistake in the my.cnf file putting all the InnoDB specific parameters under a [innodb] heading, instead of under the [mysqld] heading where it should be.

Why did this take so long to locate? It was assumed that the config was working correctly in the first place. [slaps head]...

Incorrect file segment

[mysqld]
# Stuff here

[innodb]
# innodb stuff here


Correct file segment

[mysqld]
# Stuff here

# innodb stuff here


And now everything works as intended.