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Literally don't know why this happens, but it's very annoying.
Here, the AI should have been defending French territory, but instead it keeps 90% of its army in London, which doesn’t even have a port. This army hasn't been used at all for over 50 turns
I saw the same thing when I was playing as Germany and had Spain as an ally. Spain simply kept its entire army in the capital and didn’t help in the war, which is why I lost.
Perhaps the reason is that the AI fails to recognise the size of this army and prioritises actions on the active frontline, using up all its movement points. Either way, it needs to deploy this army in battles rather than leaving it idle.