Well, I've played on M/M and haven't noticed any passive AI.
In battle they are very aggressive and respond reasonably properly. Even tried to lure me out by going up to them (after/during long skirmishing). When my heavy infantry marched forth theirs retreated to higher ground giving me a disadvantage, as their missiles also retreated in skirmish mode to pepper my oncoming infantry (- I had only short-range missiles). I knew standing there would be useless I had to charge and so did they going downhill having better ground.
Their heavy cavalry also broke through my infantry line sometimes flanking units. Of course they take advantage of weak spots: my missiles were in the back undefended. They sent cavalry at them so I quickly responded sending some own after them from the battle's side.
When the AI attacks in sieges it sends its infantry with ladders, towers, and the ram (or two). They get on the walls and I repel the schwein (I'm playing HRE ;) But(!): they send in the rest of infantry and cavalry through the main gate - all of them! Hoping for a forceful breakthrough. And as far as I've seen on M/M it's always the same maneuver.
During one siege where it attacked, they had reinforcements coming from the other side. Unfortunately this army didn't have siege equipment so it took a long slow walk to get to the front too late when their comrades were slaughtered already.
So I conclude this: the AI ain't the smartest, but it ain't the dumbest either. At least there is no passive AI on M/M in battles as far as I can see.
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