I am on the latest release of beta 1.2, and I believe there is a bug as well. I went to help one of my towns, and captured at least 5 lords, (I did not get the chance to count them properly). I then entered the town, put all my prisoners into the dungeon, sold the loot, went to the garrison to top up, then went to the dungeon to find them all gone, never even left the town. So I think sometimes they all go at once.
I fully agree they should not be ransomed by the AI, it should be me who decides when they go. The Town was fully upgraded by the way.
Also, the other problem is the food. Lost loads of good troops because the towns supply of food ran very low, and I was not given the chance to help.
Stopped playing now for a while until its a bit more developed, or the mods fix the major problems. Great game prospects though.