Considering that in vanilla everyone acted that way while now only 1 leader out of 23 does, I think the statement this one leader could make the whole diplomacy engine feel broken might be a little hyperbolic.
I honestly don't know the answer to the first question, it's more Sneaks' area of expertise. I know how much they care about actual diplomatic events can be altered globally for all AIs (which is what he does in WWGD), and is somewhat influenced by the factors I've listed below, though I'm uncertain how some of them work. A few like WarmongerHate and MinorCivCompetitiveness obviously interact with specific diplomatic events, but not the ones you asked about (sharing friends, dof's, settling, etc).
Here's the stats for one leader, Napoleon, as an example of what we have access to. I ran it through some formatting it so it's easier to read than the original data. Most of this is self-explanatory, though I don't know how a few things work. Like... what's the gameplay difference between Boldness and Meanness? And why is Napoleon so reluctant to attack a neighbor he hates if he has a big army and such high Boldness, Meanness, and approach_war biases?
An important thing to point out is the first three blocks of data are referred to as "bias" values in the files, while the last block is "flavors." This is an important distinction. Bias's appear to be weighted probabilities, while flavors are more absolute. For example, I've seen leaders with this 1:8 ratio of protective:conquest still protect citystates, and I've seen Napoleon still do DoF's. In contrast, flavors have the potential to lock out everything else. I once put production flavor at 9 and they built 100% mines and lumbermills. I think flavors are more like a "tier" system where the AI picks something of the highest flavor tier, then works its way down if that option is unavailable. Flavor 5 appears to be the midpoint.
LEADER_NAPOLEON
Personality
8: VictoryCompetitiveness
1: WonderCompetitiveness
5: MinorCivCompetitiveness
9: Boldness
3: DiploBalance
1: WarmongerHate
8: DenounceWillingness
1: DoFWillingness
1: Loyalty
4: Neediness
9: Forgiveness
6: Chattiness
7: Meanness
Diplomacy
8: MAJOR_CIV_APPROACH_WAR
6: MAJOR_CIV_APPROACH_HOSTILE
1: MAJOR_CIV_APPROACH_DECEPTIVE
5: MAJOR_CIV_APPROACH_GUARDED
1: MAJOR_CIV_APPROACH_AFRAID
4: MAJOR_CIV_APPROACH_FRIENDLY
5: MAJOR_CIV_APPROACH_NEUTRAL
Citystates
5: MINOR_CIV_APPROACH_IGNORE
1: MINOR_CIV_APPROACH_FRIENDLY
1: MINOR_CIV_APPROACH_PROTECTIVE
8: MINOR_CIV_APPROACH_CONQUEST
Priorities
6: FLAVOR_OFFENSE
5: FLAVOR_DEFENSE
4: FLAVOR_CITY_DEFENSE
7: FLAVOR_MILITARY_TRAINING
5: FLAVOR_RECON
6: FLAVOR_RANGED
8: FLAVOR_MOBILE
5: FLAVOR_NAVAL
6: FLAVOR_NAVAL_RECON
5: FLAVOR_NAVAL_GROWTH
5: FLAVOR_NAVAL_TILE_IMPROVEMENT
5: FLAVOR_AIR
5: FLAVOR_EXPANSION
5: FLAVOR_GROWTH
6: FLAVOR_TILE_IMPROVEMENT
4: FLAVOR_INFRASTRUCTURE
5: FLAVOR_PRODUCTION
8: FLAVOR_GOLD
4: FLAVOR_SCIENCE
8: FLAVOR_CULTURE
4: FLAVOR_HAPPINESS
5: FLAVOR_GREAT_PEOPLE
4: FLAVOR_WONDER
4: FLAVOR_RELIGION
3: FLAVOR_DIPLOMACY
6: FLAVOR_SPACESHIP
5: FLAVOR_WATER_CONNECTION
6: FLAVOR_NUKE