Agreed. Ed seemed to imply that the AI was actually taking this into account, but I have my doubts the AI actually takes this into account. I haven't seen the AI be that smart in my games. Did Dido even have any cities on other continents? I'm thinking she didn't move her capital because she really had no better place to move it.
The only evidence we saw for the existence of continents in that playthrough was the little bit about how the Shropshire Hills were formed at the start of the stream. It was undoubtedly a show off Eleanor piece rather than show off the new England for the most part.