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That is how you can use them, but you also need enough H2 at the hub to send them from there. Would guess that this is the reason why it doesn't work. It then takes the closest one. (but fleets also have other uses in Galaxy 4+)

So if a pioneer is sitting at a hub, and it takes 1k hydrogen to get to a planet from that hub but 5k to get there from home it will still require the 5k?

No, it should only require what is needed for the distance from the hub. The tooltip of the "send" button also shows the system a ship will be dispatched from. If a hub has an eligible ship, it should show that including the H2 cost from the hub.