This is still happening, and is affecting both Normal and Insane Human AI. Computer (Normal) doesn't upgrade when playing as Human I have never seen this happening with Undead or a Night Elf. Not sure about the Orc AI, but personally I have found this to be affecting only a Human AI, and it still happens fairly often.
https ://imgur.com/a/DwPDKbX
Also there is another issue with a Night Elf AI: sometimes, newly trained heroes and land units that get out of the production buildings, get stuck in the trees. Now, I know that can happen with any faction, but all the other factions are cutting the trees down with workers, and so the units that are stuck in trees, will be set free eventually. In the case of Night Elf, however, the units will sit in their base for ages, possibly forever, and the AI is scripted in such a way, that it will either not move out of their main base with a whole massive army of theirs if it doesn’t include those stuck units, or if it does move, its combat power will be severely hindered, given that half of their army is stuck at their main base. Most of the time this happens when AI builds an Ancient of Lore in place of their collapsed gold mine at their starting base, but this can also happen with any building that is producing land units, such as Altar of Elders, that is built too close to the trees.
https ://imgur.com/a/RgitEZZ