As of today I still have problems with my units pathfinding, both on the strategic as well as on the tactical maps.
Part of this is due to the way roads are built on the strategic map. One example:
The engine put one of the roads between cities right adjacent to a dragon's lair. I have lost several units because I set a long range path for them and since they tend to seek out roads in that case, they stop next to the dragon. Sizzle. Frustration. I can only avoid this by micro managing them into a detour. Worse, I don't seem to have/get road-building capable units any more, which might help to circumvent the problem.
Countless other examples in road-less wilderness -- a pioneer sent out to claim a resource somewhere will go and stop next to a known monster lair.
Squish. If that unit had the wits of a gnat it would detour around, but no ... having to micro manage every unit across the strategic map is not my idea of smooth hassle free gameplay.
On to the tactical map.
I summon a Fire Elemental. Flame clouds ... I set my champion to attack a unit past the fire elemental, now we're looking at a straight path from my champion to the unit that wants attacking -- what does she do? She actually puts a kink into her path to detour through the flame cloud and take damage instead of riding in a straight line (the shortest way). This is ridiculous. It is majorly annoying, even if the flame cloud cannot seriously damage her at this level, it still is gnat-wit city all over again.
I have had many more instances where units walk - shall we say an unfortunate path, or put themselves in a seriously dangerous or undesirable position when you target an enemy unit and send them in to attack.
On the tactical map it would actually be advantageous to have the ability to micro manage your units step-by-step instead of losing the remainder of the movement points after one move, to avoid this kind of frustration.
Incidentally I have not experienced the One City AI thing in the 2-3 games I've played in the 1.3 beta, so far. Go figure. Nor have I seen any of that assassin armor that was muchly talked about a while ago. Not any: none. (and this is games started new, with 1.3 - not 1.2 saves reloaded.