1. Many of the Governor Defs De-emphasize morale. This doesn't matter much in the base game but with how you made morale a significant modifier to a planets production and ability to resist invasion the AI can get stuck with a bunch of planets just sitting there waiting to be taken.
The governors all have an approval building for every farm in their listing, and most have an approval building listed as the second or third thing they build - long before they build enough farms to fill it. I've yet to see any AI being outright crippled by approval problems in the mod (they usually average 95-100%). There's been a few instances where individual planet approval dips significantly below 90%; these are almost always a result of farm upgrades being researched and built before the corresponding entertainment ones are developed. Given the way the AI picks techs, it's impossible to prevent that happening from time to time.
2. The production sliders in the stratdefs combined with the offsets of the planetary governors make the production and research worlds go to 100% military/research. This ends up with the AI planets building up very slowly, and in the end, not amount to much.
That's not entirely accurate; they DO amount to much in the end, much, much more than they would through any other wheel settings. But yes, they build up more slowly than I'd like. But this is hard to do much about with the tools available tbh; the AI is not reactive and won't change the planetary wheel unless it's shifting the global one, so it's either a slow build up to high output or a more rapid build up to terrible output. The AI has become vastly more challenging at normal since the implementation of the offsets, and reducing them is likely to detract from that rather than improve it. For example, if the offsets were at 50% then the AI may set up a little quicker, but would be handicapped on it's good worlds by the need to constantly run social production projects that are basically 1/10th as effective as it would be just going into the primary stat.
That said, the social production from the colony hub means that the AI (and the player) always gets 5 social production regardless of morale or slider settings, so it can always build or upgrade a 'normal' building in 6 turns. Also, the sheer size of the maps which the mod is based around gives the AI a long time to go about building up it's planets (and boy does it build up - I've seen AI cash planets producing 200 per turn, which is middling for a human but astronomically better than the 10 or 20 tops you'd see before), which excuses it's slow rate of increase substantially. I tend to put production on new planets to 100% whatever-its-doing by the midgame myself, and just use the 5 social production to build the improvements, as it cuts down on micromanagement and given the combination of the timescales and the number of planets it doesn't matter to me much if I have to wait 6 turns instead of 4 to get the next lab/market/factory.
It's very, very noticeable on smaller maps - more so the smaller you go - but since I have no means of telling the AI to adapt to map sizes it's largely moot. This AI will be as hopeless on a Small map as the vanilla AI is on an Insane one; there's just no way at present of having one AI script that does both well. The differences are too great. Since SD are more interested in catering to the smaller map sizes - as that's what the audience mostly play - I'm catering to the super-huge; the mod's relative popularity, while flattering, is mostly made up of people playing on map sizes which I'm not really supporting. The fact they've been drawn in by the balance changes is more a reflection of the problems of the base game than the quality or objectives of the mod.
With these two combined it is easy for a planet to be stuck with a medium population, low morale, and very few buildings that contributes almost nothing.
As I say, it's not really that easy. For a planet to have 'medium' population we're talking around 30-40; just getting to that size takes long enough to build a half dozen buildings. Even if it does fall into low morale (which it rarely does), it's not trapped there, since it continues to build at pretty much the same rate it did anyway and will eventually churn out approval upgrades.