Bay of Destiny

Personally, the AI Demon defeats the AI Elf in 90% of cases.

This happens due to the specific development of the Town Enhancement AI. The computer builds the Town Enhancement magic tower in the castle last, so the battles between demons and Town Enhancements are based on the number of troops. Whoever has more troops will obviously win.
The proposed changes will still leave the map as a quasi-multiplayer experience. A person playing as any faction will easily defeat the AI; they will be the only ones who can move around the entire map. In a 2-player game, the one who chooses Dungeon will have a significant advantage. And if both play as Dungeon, Town Enhancements will be the clear leaders (I agree with Bravo1853). They will gather artifacts faster.
P.S. The shield from the dragon set can be obtained without going through its guard.