i think it means they don't actively go for other victories, eg space. But I don't think they "work their butts off". I am guessing that the main problem is that the game settings don't seem to affect the AI leader's preferred builds etc.
So in an Always Peace, Cultural Win Only game, Monty will still build millions of units. And lose horribly.
Gandhi will spam wonders and religions, but he will also do that in Always War, Conquest Only Win.
I have discovered that Always Peace, Archipelago, Cultural Win Only is an incredibly easy way to win because the AI leaders waste vast amounts of time colonising millions of islands while I just build the minimal number of cities for cathedral spam, plus one warrior per city for garrison, and storm off to victory with seafood-powered Sistine-boosted artist specialists.