The most common and most likely answer to this crossword clue is the 9 letter word ILLEGIBLE
I've seen this crossword clue in The Times
I
L
L
E
G
I
B
L
E
Buddy explains!
The straight part
We know that "Displaying deficiency in character-forming action" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case displaying deficiency in character-forming action = illegible.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does ILLEGIBLE mean?
ILLEGIBLE adjective- Not clear enough to be read; unreadable; not legible or decipherable.