They shift too many units to the Hungarian and Rumanian sections of the line while leaving the north too thin. This has nothing to do with the Human_AI command. It is all about the balance having shifted radically against Germany.
That may be true, but would not be exclusive to AI Germany. In my human_ai games observing Russia, I've seen the Russian front/BP do some similar things, like shifting 203 divisions to the southern front as
evidenced in the second and third screenshots in this post. Now mind you that's AI Russia fighting max boosted AI Germany from late January 41 to November 41 before suddenly deciding the south needs 90% of the western front divisions. So to me, the variances we see may just be a result of RNG/Bugs in the AI front/BP management. I've also seen AI Germany games where AI Russia does a steady march west effectively and Berlin has fallen by May of 41, half of Hungary, all of Slovakia, all of former Poland. I want to say this is the most common result, but I think it might be my cognitive bias showing from the traumatic imprinting of AI Germany's worst defeats to the AI Soviets.
In my 2 Guatemala games though, I couldn't see what the AI was doing over there, so I have no idea about the differences and front dispositions, encirclements or routs, as the war went on. So I can't really say why.
The way they send their units to lower priority areas and throw them away on boat rides is not something they can afford to be doing.
Yep. It's just too easy to play the UK and convoy raid the east side of the Atlantic while the Axis send units. I think that might be why the AI in my Human Germany 1940 game might do a bit better than my Human 1939 game, in that I don't call Italy in to the war with the Allies in 39/40, so it can send all the divisions it thinks it needs to Ethiopia and Africa without being sunk. I think that also explains why in my Human 1940 game AI Germany successfully invades the UK, because I've kept the Kreigsmarine in the Baltic and is in good shape when I hand it over to the AI, where as AI Germany in the 1939 save will lose a lot of it's navy and air power in 39 before Germany finishes conquering France and friends in western Europe.
The new resource penalties are very much against the Axis. This is dead on from an historical standpoint, but combined with other factors it is no wonder that the German AI is virtually always dead before the end of '42 now.
I know this is probably a factor. But from the human controlled games I've done, AI Germany still manages to bungle it up when given control in 1939 vs 1940. That to me indicates a production / inventory management issue, in that the AI is consuming inventory and does not have enough surplus for a sustained war against a capable opponent. If AI Germany and AI Russia are at the same level of equipment for the field armies, AI Germany loses since AI Russia will have more divisions/better resistance, short of doing dumb things like 60 divisions in a single province that has like 4 infrastructure for a month or three. Hmmmm there should be a way to test this. I have no doubt you and Meglok are right about the resource shortages and penalties having a role in all this. But the AI just seems so much more aggressive on recruitment that there is never really a surplus of inventory, which means the combat effectiveness per division tends to be lacking. IMHO anyway.
The game I had just watched, the AI threw inf at the damn forts with dug in SU soldiers. They lost bitterly then from what I can do the SU just punched through here made their way to Berlin by early 41.
As Dalwin pointed out, perhaps AI Germany has an issue with protecting the northern front. So if you see AI Russia beating AI Germany, make note of the lands it has taken. There could be a bug or something going on here where AI Germany is abandoning Northern Poland for whatever reason. (Sweet Sweet Oil in Caucasus? maybe)
@Gwydion5 You're pretty spot on,
Thanks, I try to be thorough in my testing so my assertions ring true. Double checking my assertions is always a good thing, it will either build consensus or it will reveal a flaw in my assessment. Both are win win in my opinion.

So thank you for taking the time in doing your own tests.