Yeah, it got worse since 1.11.
In my latest game, Austria without Burgundian lands attacked bloated Ottomans on its own in 1500. Of course, they got annihilated. The HRE was open for business and got eaten by Brandenburg, Poland, France, the Pope and Burgundy. Now AI Prussia destroys everyone, funny to watch. Thank God I'm Persia.
I did some tests, it seems that the AI doesn't check ally strength or recruitment potential at all anymore. I deleted my entire army as full grown Persia and even 5 province hordes dowed me, despite me being allied to the most powerful nation on earth (the Turks in this game).
The ally stuff seems like a bug. Yet even without it, the AI really has to factor in the economic potential of a nation. I had 2000 ducats and 100k manpower, Aq Q had like 17k troops in total. How could it ever win, even without my allies?