The Workflow or Server Side Script I am using is not setting custom form. Is this a standard behavior?
The Custom Form field by default gets set to the preferred form. When using a script and setting the field server side, the field gets overridden by the preferred form when the record is loaded.
How to Fix it:
To fix this for workflows the trigger on must be Before User Edit or later client side (Eg. Before User Edit, After Field Edit, After Field Sourcing, etc). For SuiteScripts this must be set using a client script. Page Init will have it set immediately. All other functions will work as well for client scripts.