The starting happiness was actually increased from 9 to 12, which is why MantaRevan on turn 20 saw that it was very high.
What has drastically changed is the unhappiness. The AI originally only suffered something around 66% of unhappiness of a normal player and even 50% in Deity.
Now it's more around 90%-80% depending on difficulty.
So basically the AI can still expand without issues but it won't end up with 100 happiness with a huge empire anymore.