The issue is that now that fleets focus fire, the enemy runs out of ships before it runs out of morale and shatters. This would be solved by the player and AI retreating when they are losing a battle, but the AI is seemingly incapable of doing that at the moment. Even on land battles. The player has no excuse, if you know that you are losing a battle and you do nothing you are an idiot.
Or in most cases its because the player doesn't even know when a naval battle suddenly takes place. In war almost all of the land troops are in one central theater of war so player can easily take note of when fights break out but navies are mostly spread out in various trade routes making it difficult to keep track of when a naval battle suddenly breaks out.
Often times I only realise my navy is being sunk at the fag end of the battles when either I am close to stack wiping them or being stack wiped myself.