Is this a general problem with the game? I'm trying to be conservative with my blood but the AI seems to enjoy casting buffs whenever I encounter a rat. Then, when I have managed to awe + bite all hostiles in an encounter, as soon as I switch away from a character it just stops bleeding the enemy dry and continues fighting them (usually resulting in a big mess because everybody else is interrupted and suddenly all the enemies are back fighting).

I'm aware you can pause combat in 1.1, but that doesn't prevent my group from doing stupid things on their own.

I'm in the Tremere dungeon now and after having Wilhelm and Serena burn through all their blood and vitae to kill a few hoppers (and then repeatedly get us killed by breaking out of feeding in mid-combat), I'm about to give up (or resort to cheats to counter this "handicap").

At this point, I feel like the bigger challenge isn't the enemy AI but my own allies.

I don't remember the AI being this suicidal and counterproductive when I first played the game after its initial release. Am I missing something or is the AI supposed to be this annoying?

The ai is clunky, but you can tweak auto casting in game options. I only let them use melee weapons too, or they shoot at everything. these things will all be fixed in the Age of Redemption 2012 mod, Javokis reworked the AI and fixed it so they don't try to shoot through walls ect or get stuck.

The shooting through walls issue only occurs if you set the party stance to Neutral. Try toggling between Defense stance then use Aggressive stance. Neutral stance looks to be bugged and doesn't use "line of sight" protocols for the AI, but Defense and Aggressive stances do.