In the context of early 1990, the AI companions are awesome.

For an NES game, they're even more awesome. Especially the fact that their AI isn't set and that they can actually learn by doing, in other words, the modern definition of AI.

The western version had improvements to the AI like picrel

I'm not a bad JRPG player like so many of the retarded zoomers here, and yet even for me DQ4's AI often pulled moves that were more effective/suited than what I would have done. In other words, if someone complains that the AI is retarded, I don't buy it.
I can understand wanting to issue your own commands though and there is a game genie code for that.

The only bad thing about DQ4's auto battle isn't with DQ4 itself but with all the copy cats that followed and wanted to imitate that and did a poor job at it, like Natsume's Chaos World.