Well you answered yourself when you stated VH. As mod description says, its meant to be played on Normal/Normal. Above is only for experienced players, there are many who even play DeI only on Legendary as they enjoy the difficulty compared to base game Legendary.

Overall Rome 2 AI is hardcoded to recruit max amount of armies it can at given imperium level and then fill it will any units available, not really taking into consideration, as long as it will still have few denarii of income. On VH, AI gets more money and more upkeep bonuses.

Thanks for the reply. The max amount is two though (playing as Iolei, the AI has 2 settlements), and they are building four to maximum strength from turn 1.