It's not so much the AI in my opinion but more the range require for them to see you, they can't see further than 10 feet it really feels dumb, I do hope they gonna tweak this.
It's especially annoying when you're questing, you fighting ennemies, and a bit furthers there are other ennemies standing still, chilling, as if nothing is happening, doesn't give me that immersive feeling..
I know it's probably a pain to figure out a nice way to balance this due to the numbers of players in an area at the same time..
It would mean if there is like 20 NPC in a town they should theorically all be coming at you which gets complicated to balance.. it's not a fight that you would trigger but a battle, but I'm sure ESO can improve on this side, I don't know.
I'm curious what people think of that.