Setting objectives for the AI is at best useless and at worst can cost you the war.
You do know that during the real 2. WW things often did work like this? There are countless reasons why an army or corps commander would not or could not do exactly as his commander ordered. That's called "initiative", and especially the Germans were quite good at leaving their more senoir commander some operational lattitude. Ofcourse this didn't always work out so well, perhaps one could even say IRL at times real damage was done by commanders not doing exactly what they were expected to do.
As an example: think about the way HG Nord used the armored formations alloted to it to prevent the Heeresgruppe from being isolated in the Baltic States after the Soviets broke through HG Mitte in the summer and fall of 1944. The later GFM Schorner used these armored divisions up north, in the area of AOK 18, instead of employing them further south were OKH ordered Schorner to use them. The result was the encirclement of HG Nord in the Kurland pocket and the loss of valuable formations during the far more important defence of Ost-PreuBen. Another example would be the retreat of Pz.AOK 1 from the Caucasus in early 1943. Although GFM Manstein ordered this unit to evacuate it's dangerously extended position with all possible speed, the commander of Pz.AOK 1 Gen.Oberst von Mackensen decided to fight a prolonged rearguard action against the advancing Russians. The net-result was the near encirclement of this entire army against the shores of the Sea of Azov and it's inability to play a part during the withdrawls in the Ukraine in the early months of 1943 when it's divisions could have been put to very good use.
Just because a senior commander orders a line of advance or withdrawl or sets a geographical objective doesn't mean a subordinate leaders will do exactly as ordered. This is just the way the AI works: it will do exactly as you ordered, unless it decides it has other priorities that take precedence.
The AI controlling the fronts uses armor and infantry completely randomly. If you want your armies to enjoy the benefits of chain of command in any meaningful way you have to micromanage every single division on every front. If you don't do that, its total chaos. The AI will send your units every which way and never keep them close to their HQ.
You're right, and this can be very anoying. But using AI-control at army level instead of army-group or even theater level helps quite a lot. This also prevents the AI from mixing up armoured and infantry divisions: just put your panzerdivisions in a designated army (just like the Germans did IRL), set AI-control on army-level, and there will no longer be any mix ups. The game mechanics aren't perfect, but if you know how to use them you can surely work around most of it's flows. Also remember this is a game, not a fully fledged piece of software developed to train real army officers. It isn't perfect as a simulation and imho we can't expect it to be if we don't want to pay hunderds or even thousands of dollars. The value we get out of our $40,- or so is what we could expect with such a complex game. It has it's faults, but an experienced player can work around this quite well.
Defense doesn't work lol.
Well, if it doesn't work for me, it doesn't work for the enemy either. Right? This game is about balance and in this case there is nothing wrong with that.