The Italian AI behaviour was OK.
Except from building Wonders in Sardinia! All the rest seemed OK. It seemed a bit too easy conquering Yoguslavia, but that is another story that we've discussed before.
Off course he did not move troops to Africa, he just let them rest in the mainland. When I tried to invade Sicily, I was overrun by TONS of troops. But transporting units is not the AI speciality.
Even though there was a long war Italy-Turkey, no cities changed hands. I never knew what really happened there. Maybe was a 'fake' AI war just to ilude me!
But I won just because of one thing:
Lethal Land Bombers.
I was losing in the end of 1942 so I just placed a whole lot of Bombers in Malta and started destroying roads in Sicily. This attracted troops (predictable AI) and I start killing them with just bombers. Without oil, the few remaining italian fighters were soon killed. So, I just kept killing units until I catch up with the Italian VP's.
THEN I had the stupid idea of invading Sicily! My slaughtered units rendered him quite a few VP's... I was losing again... so I intensified the attacks!
I used wat was to be the "Sicily reinforcements" to invade Athens, while kept killing those marines in Sicily... it was a close call!
So I won just because of Lethal Land Bombardement. Not a real victory as I did not conquer much in Europe. That is why I think it should be removed. It's not very real and it can help into a "deviating" victory. Also,
maybe you should consider reviewing the VP's for killed units.