The British defence of its homeland AI is messed up.

[Jon Shafer]

The only militia is what the UK starts with. I made it so that the UK AI will concentrate on building lots of Infantry at the start of the game, then shift to bombers and transports etc. later on when the focus of the war shifts.

Johan has made it known (somewhere) that the AI will recall units to its 'homeland' if it's threatened.

 

[Jon Shafer]

I think the UK divisions might be going into 'HOLY CRAP THERE'S GERMANS IN LONDON' mode, and tries to 'seal off' any possible breaches, while the expeditionary forces are under a different AI, and they're the ones that end up actually doing things...

Or Paradox is trying to tell us something.