I started playing the 1066 scenario and I noticed the AI were puppeting cities. Now this scenario has no unhappiness. There is no penalty for annexing cities. Furthermore, I don't even have the option to puppet, so it strikes me the intention is to not have it.

Anyway, this is the first time I've posted a bug report. Should I attach a save? Anyone else notice this?

Yes, as per the sticky notes atop this forum, please include the patch version that you're playing and attach a save game. A screenshot to support what you're describing also helps.

It's Steam, it's an updated patch. It would literally be impossible to play the scenario without a patch. But, anyway, here's the save. I'll upload a screenshot next time I play.

Here's the screenshot. I also attached a screenshot for a second bug. A relatively minor one, but all victories with France are credited as William the Conqueror victories (even ones that happened well before the scenario existed).