Game analysis: You lose

[Rebellious Waffle]

You might be able to get a mix of both options with a sort of "mob rule" provision in the AI, where all your neighboring factions ally and blitz you if you've gained X many provinces in the last Y turns (For example, 6+ provinces in the last 10 turns) or if your 'overall faction ranking' is comparable to that of all your neighbors' ratings put together. When the crisis is over (i.e. you hemhorrage power by the bucket) the AI settles down and goes back to business as usual. If you don't hemhorrage power by the bucket and you conquer your neighbors, you get a new crop of neighbors who pick up where your old foes left off.

It's been known to happen in the course of real history, so it could potentially be included for reasons above and beyond game balance. (I suspect CA had something like that in mind, but the AI's aggressive-mode isn't anything like savage enough to pull off the effect. That's the only way I can explain the flurry of port blockades and milita attacks that crop up as I crawl across the map.)