From: Austin, TX, USA
The game is designed to respond to the individual soldier's morale, and anything less is a handicap one way or the other. If the AI always obeys orders, then it sends more teams to slaughter that would have retained a few members to refit. The AI loses experienced units at a much higher rate. Turning initiative off spoils the different abilities of more experienced troops to move to intercept the enemy or join a fight where they could reinforce, so the AI is ultimately more vulnerable. The massed infantry attacks are fun to gun down, but further removing CC from simulation to game.
An important reminder on command units---apparently, Cross of Iron integrates a need for command and control more than TRF. Units on ambush will stay put for a much longer time if in command radius. And they will act more cohesively, using initiative, in a firefight alongside other units all under a command radius.