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Yes, Evolution does seem to be quite confusing. I think the problem might be that you are looking in the wrong place to set this. Although you'd think you'd set this under signatures as you've described, you actually set it via Edit => Preferences => Mail Accounts => Edit => Identity and at the bottom of that pane you will see a dropdown with signatures. Here you choose the sig you wish to use and viola!
Hope this solves the problem.
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