That's actually a good tactic that I often use myself when short on money.
When I want to reinforce divisions without shelling out for defence spending or promoting pops, I bump defence spending up to max for a day, mobilize, reinforce, demobilize. I used to feel guilty about it being an exploit, but heck, the AI does it
HE STARTED IT!!! (----> points at AI Austria)
Memnon, as far as Bavaria's ridiculous mobilization, that's a known bug. They have a line in their AI files somewhere which specifies their starting mobilization pool... goes something like "mobilization=#" whene "#" is their starting mob pool. Well, Bavaria and some other German minors have "mobilization=*" (something no other country has) which results in their mobilizing close to 1/2 or a million men, sometimes more than their entire population. There's also a simple fix on VickyWiki.