Spell issues:

1.  Tremor:  Tremor seems to divide its effect by the number of opponents in some fashion, so that a large enemy is immobilized for a shorter time than a small one.  That's good.  The in-game text give no mention of this and the length of immobilization time is not apparent when the spell is cast (it always says 3 turns).  That's bad.

2.  Tornado:  After being hit with a tornado, the AI tends to avoid restacking the hit units ever again, allowing them to be whittled away for several turns.

3.  Tornado/all other damage dealing spells:  The AI likes stacking its entire army on one square to begin an invasion.  I hit 56 units with one tornado.

4.  Air Walk/Call of the Titans:  The AI appears to have no ability to either use these spells, or plan for their use against the AI.  It depends heavily on a defensive perimeter.  The AI doesn't appear to consider the possibility of using spells against it at all, for that matter, but I expect that accounting for these is exceptionally difficult.  I would remove them from the game rather than invest the effort required for the AI to handle these.  Alternatively make them give a 1-turn bonus to movement instead.

Building Issues:

1.  Forge of the Overlord:  In every game I see one or more AIs build the three towers early and then take forever to build the forge.  By starting a conversation with them every turn, I began to realize what was happening:  The AI does a really poor job budgeting its metal and crystal, so that it never manages to get fifty of each.

2.  Towers:  AI gets angry at you for building them even if the win condition is disabled.

3.  Adventurer's Guild:  The fame mechanic makes taking an opponent's city with one of these very powerful, since it's the only quick way to get +2 fame/turn.

4.  Scrying Pool:  Every spell added to the game makes this more powerful.  Also, the GUI cannot show cities with 6 essence on the name bar (and yes, this does happen in non-modded games!) because there is only room for five slots/indentations/whatever in the name bar.

Tactical Combat Issues:

1.  As important as initiative is, the game should clearly explain how it works, including under what circumstances a unit gets to move twice before its opponent and so forth.  

2.  Some of the new buildings on the tactical cause odd tactical situations.  I so wanted to post a screenshot but apparently I have to upload it somewhere first.