I played the big Midway scenario (no Coral Sea) over the last couple of days as the USN. The AI was set to FOW for the Japanese. Anyway, something sort of wild happened. The Japanese sunk about 2/3 of the USN subs. Knowing that I couldn't control them effectively, I had set them to submerge and set the speed to 1knot (thinking that they'd mostly be safe). Big mistake. The AI hunted them down with its escort groups and pretty much wiped them out, particularly those in the line that runs N-S in the game.
IMO, it really does appear that the AI is TOO effective in this regard, and some changes appear in order.