Well the specific issue that submarines engage the wrong target most certainly is a submarine issue only though

(For CLs for example which are supposed to mainly be targeting destroyers the current targeting priority works just fine).
I really dislike calling any large system like this "broken" though because it means radically different things to everyone, and parts of the systems do work as intended.
I agree that Navy needs alot of improvement, but some of the things it actually does really well and even greatly surpasses the previous HoI games Naval model, like for example:
- How sufficiently large fleets can block invasions.
- How Capital ships with lots of armor take reduced damage from smaller guns
- How Carrier airwings can be tailored to their task ( from figters to win over enemy CV fleets, Naval bombers to punish fleets and CAS to support landings outside of own aircover )
- How different Carriers can have unique and different deck size / airplane capacity
- How land based air superiority can counter Carrier fleets fully
- How portstrikes can be defended against by air superiority cover
- How torpedo attacks have their own mechanics and stats such that DDs can easily dodge them while they do much damage vs Capital ships
- How aircover boosts naval detection greatly
- How larger invasions need to be prepared in advanced and can't be launched at impulse
- How resources import flows overseas can be disrupted from day of the war one by sinking convoys on the route, and how this directly impacts production of relevant equipment.
- How smooth split of repair / return to mission or new ships joining Fleets on missions works without any micromanagement needed
- How damaged individual ships try to retreat from battle instead of always fighting on until sunk
Yes there are issues, but the base system is vastly more complex and promising then Naval war in HoI3 or HoI2 was.