Except that it would actually decrease the AI's performance. Deploying units in stretched lines is more logical than forming "boxes" in RTW, because only the first few lines of soldiers fight and the rest doesn't really affect the unit's mass or anything. In fact, in a "boxed" formation you usually get higher casualties, because it's easier to flank your soldiers during combat (I'm talking about "standard" combat, not about flank attacks with other units). Note that manoeuvres are much much easier in RTW than in RL and it is ridiculously easy to turn your units around, too. Now combine all this with the AI's inflexibility, the way it handles formations (it's damn hard to get the AI to actually form a coherent line - usually it's just one big mess) and general dumbness and you will quickly understand why things work the way they do.
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