Bug appears for both AI as human players. Flying an aircraft with air to ground missiles you can use the "next target" key to select the next enemy target before the radar has identified the target as friend or foe. While I would personally want to see this key command gone all together it should at least be fixed to only work when vehicles have been identified.

AI pilots engage with ATGM at these longer ranges as well, proving they are actually benefitting from the bug.