I have so far played at medium, thinking of switching to hard as I saw that it was the recommended one, but my impression from posts here is that the AI will then be much more aggressive and back-stab you at any opportunity, which I don't think is really historical, and which sounds a lot like the RTW engine, in which diplomacy was virtually useless as the AI would sooner or later attack you if you shared borders, no matter your diplomatic relations.

I recall in my recent KH campaign (medium CAI difficulty), me and the Ptolemaioi were allies for well over a century, cooperating against the Seleukeia. It was only after I started to purchase their provinces on the Anatolian peninsula that they for some reason grew sour and back-stabbed me. Would this kind of long-term alliance despite shared borders be possible on the hard CAI?

Which CAI difficulty level do you typically play at, and why?