Please just disable looting capitol in peace treaty until you can fix it, or at least tell the AI not to do it.

[Pellucid]

I can't count the amount of times I've watched Austria pillage OPM Tirol someone forced them to release in this game instead of taking back their core that's dividing their territory. It's absolutely absurd that the devs think that this behavior is acceptable for the AI. Just make the AI stop doing it. You've already made it almost completely pointless to do anyway, why still have the AI even consider it in peace treaties?

 

[Zelius]

In my game the AIs take each others' capitals just fine, but the HRE minors seem to survive into lategame. Maybe the bug is actually the AI being too reluctant to take HRE provinces / annex princes, to the point of not accounting for their own cores?

...In fact, it's 1710s and there are 43 princes and 12 free cities:

 

[Pellucid]

I think the bug is that the AI is coded to keep fighting as long as it has war enthusiasm until it can get "what it wants" from the peace deal, and since taking a capitol province and looting are mutually exclusive and the AI is coded to always want to loot, it will often check the war state and see that it can get what it wants (to loot the capitol) and peaces out early. It seems less likely to have the same issue if the enemy's allies drop out of the war first or if it gets enough warscore in one go to go from being able to loot to being able to annex. So it happens most often when wars are very short but involve a lot of participants, which is often the case in the HRE.