Well,technicaly,it does...engine temperatures are switched on for AI...so when temperature goes up,AI is forced to throttle back,to 95% max...maybe that is still too much so AI burns the engine.
My bad. Thanks for the correction.
My ignorant guess is that the reason that AI planes burn out their engines is that going back to 95% throttle often doesn't work to cool overheat, and they might not open their cowling/radiator vents all the way. They also might not take measures in advance of the fight to keep the engine cool as possible or take advantage of combat situations where you can throttle back a bit (e.g., a long dive when you're in a faster plane, overtaking a slow and poorly armed/crippled opponent).
My technique for avoiding overheating engines is to open radiator vent/cowl flaps completely and go down to 90% or even 85% engine speed once I get an overheat warning. Basically, whatever it takes to get the engine to cool down within about 10 seconds or less. Once the engine temp falls back into normal range, then I'll cautiously boost back up to 95%-100%.
The exceptions are that I will use just a few seconds of 110% power when I need every bit of power I can get (e.g., a steep climb to make or spoil a deflection shot or to make a short run out of gunnery range if an enemy's on my tail) and I'll go all-out if the engine's already shot or if the alternative to blowing the engine is certain death.
Also, unless I need every bit of climbing power/speed I can get, I usually fly with vents/cowl flaps open all the time, throttled back to a relatively low cruise speed with prop pitch set appropriately. Obviously, this isn't always necessary or appropriate, but the idea is to keep the engine as cool as possible until you really need the power.