The simulated system pits all troops against one another. Hence, the experience is divided across a larger base.
When you manually control a battle, only those units who engage and achieve kills are credit with exp. The usual predicament with this system is that the high tier units get all the kills and leave nothing for the lower tiers.
Can you try this - in battle, just send out your lowest tier units to charge (you can group them as group V). Once they rack up kills, they will get experience.
But yes, it's just simpler right now to auto-resolve battles against Looters (only looters) as they only wound your units. The auto-resolving with others cause deaths.