At my school in years 7 and 8 the year group was split in half - the X half and the Y half. X and Y did not mix for any subjects. There were sets 1-4 in X and also in Y. The X group was higher than the Y group - ie X1 is higher than Y1, but Y1 is still higher than X2
We were set for maths and science (I was in X1 for both). English, PE, dance, geography and history were with our form groups. All other subjects (food tech, ICT etc) were in the same mixed ability classes.
Come year 9 when we started our GCSEs they mixed the X and Y halves of the year group and split into a new X and new Y. We were re-setted for maths and science (I was still in X1 for both). All other classes were mixed up but were not in sets.
I don't know why my school chose to make the setting system so complicated!