Yes, that is still the way it works with higher tier troops giving better results in autocalc. But now, in practice, the AI is a lot less likely to target player settlements due to the rebalance to their targeting priorities. Before it was heavily weighted towards going after weak garrisons and now it is more weighted towards distance. So you can no longer count on a strong garrison as a defense if you have a border castle but you also don't need to give a damn about your garrison's strength if you have a fief that is deep in your territory. The AI does consider quality because it uses the same GetPower method that accounts for troop tier in autocalc but you can afford four or five tier 2 troops for every tier 5, with some coin to spare, and those do better in autocalc.
The priority thing is a change I don't really agree with (precisely because it opens the AI to a lot of cheese tactics, like taking a weak interior holding and dumping units inside to create Fort Doom that the AI continuously welps armies against) but it seems like the majority of players want it, so here it is.