Usually have the setting on unless watching the AI play against itself or if I want to force total conquest games where Domination is also turned off. I just kinda wish the mechanic wash pushed back a little further than Feudalism, which isn't hard for the AI to get to in a decent timeframe in higher difficulty games.
Vassal mechanic can be...frustrating, to say the least. It isn't hard to understand IMO, it's just there is often little you can do to intervene in AI-AI behavior short of bribing wars, and it isn't always worthwhile to take capitulates depending on how stubborn/still useful they are and the stage of the game unless you just want to take a rival off the table ASAP.
It also does a lot of things that don't really make sense, like bringing in war allies for nothing, circumventing previous peace treaties or enforcing new ones that weren't made with the party in question, and the incredible boost it gives to an AI evaluating its own power rating which can lead to crazy stuff like a 1 city master with a 4 city vassal refusing peace terms as you run them both over, forcing you to kill them off.
It definitely makes the game a lot easier with vassals on if you know how to abuse it yourself, though, and there are often flip sides to all the cheeky crap the AI pulls with it. Chain capitulating, buffer states, intercontinental footholds, gaining a permanent vassal through diplo when building up for war without lifting a finger, capping a vassal without ever attacking them by capping the master same turn, etc. all make it worthwhile to deal with the headaches. And hey, they might even help you tech and trade too.