The boost to the ai health is probably not noticed since i doubt they are always picking intelligent items... so while you expect an erebus to start with near 3k health (botf and 550$ armor), the ai has probably picked the goggles or something, i havent played since this all came into effect, does it work for when a player leaves? if i was rook at lvl20 with some nice gear lets say 12k health and then i drop, would the ai get like 20k health?

I did not specifically code it for this, but looking at the code again the buffs and other new game options specifc to AI should apply to any AI controlled demigod, including when an AI takes over for a player that leaves.