AI is far too concerned about star ratings while completely discarding players' form. Whenever I leave a club, there is always a few overperformers with 2.5* or 3* who used to get ~7 (say A) and also some guys who don't play well and hence didn't play much under me even though they have 4* (B). But after a new AI manager is appointed, they totally disregard the good form A has been in, and he may or may not even make the bench. Often they are transfer listed straight away. I can understand a clean slate but no real managers go into a club and just send a regular starter for 2/3 seasons straight into shadow realms based on his assistant's perception.
This type of things also affect loan dealings. One of my low PA strikers used to wreak havoc in the league one and two but I never got even a midtable Championship club approach him for loan. Since his CA/PA was low, only the league one/two clubs would want him on loan, and he would get 20+ goals every season but no higher profile clubs wanted him. This has been a long time problem and I hope SI would take a look into this