Yesterday I had several opportunities to see my cavalry in action in 1.8.0 in detail, and it's indeed ... sad. I especially remember a lonely unarmored guy fleeing while about 10 riders (f.e. cataphracts) charging at him over the fourth part of the map again and again, without hitting him once with the lances/spears. I think they killed him shortly before the border by charge damage.
the bonkers aiming happens with both mounted and foot as long as they are trying to use long weapons.
As for riding bonkers aim it affects us too, have you ever noticed how off the hitbox for couched lance is? Even if it has the highest possible length, if you ever try to hit anything in front of your horse it's 100% miss, we must adjust to odd angles to hit things, now, if for us it's challenging, imagine the AI which has pure auto-aim?
So what happens with the AI on foot, for instance, is that they basically try to french-kiss their opponent using a 2h axe and hit with the "pommel" doing 2 dmg a pop. If the opponent AI holds any shorter weapon, they'll probably connect more consistent hits for full dmg. Knowing this what I try to do for mitigation is buff weapon handling for the AI through captains. When the handling's high enough they'll still be hitting wrong, but at least the dmg's higher giving them "a chance". The pattern happens the most with weapons with 130+ length for swing on foot, all lances and longer spears when wielded with a shield, and all polearms on foot. 2 handers are passable as long as the AI has high enough skill lvl or the 2h weap's "shorter".
From my tests, the best AI spear's Pilum for troops, Menavilon for comps if you want a spear shieldwall for instance.
For polearms, only and exclusively normal glaive and bill hook, the pole falx will often hit horsemen but will almost always miss infantry units.
AI does pretty well if menavilon if held without a shield too (menavilon units are OP as hell against most infantry as long as they are mixed with shielded units)
For cavalry, it's the opposite, they can't deal with short ranges for polearms, although they do fairly with glaives (due to higher attack speed), as for lances they do well with the Khuzait lance (Noble Lance or something), so-so with vlandian lance and Cataphracts are a hit&miss, luckily catas switch to their secondary one handed often.
Still cav has the most hideous advantage due to how horse charge collision and horse pass-by collision work. It's hard if not impossible to stop them without spear carrying units.