AI starts reasonably armour tanking when it gets to high flux, when it should shield flicker right from get go.
Should it, though? My guess is that if it did, there'd be complaints about it taking unnecessary damage. And, it's a hard decision to make. Continuing a stalemate - get fluxed, back off, come back in, etc - is a "safe" option that gives the player the most time to make a difference. On the other hand, if it starts the "I'm losing armor and hitpoints, and may or may not be actually getting anything for it" clock right off the bat...
One way to help with attrition could be to give low tech ships old impact mitigation's 90% max damage reduction in a hullmod ("Time-tested armor design" or the like).
Still gets smashed by big HE hits, but the aggression can be turned up a little.
I'd like to see interruptible Burn Drive in action before asking for more low tech buffs.
If anything, issues with low tech at this point could be mostly resolved by AI changes (not saying it would be an easy thing to implement). Aggressive and actively armor-tanking low tech with interruptible Burn Drive could be a menace.
I think Dominator and Enforcer could definitely use some help.
XIV Onslaught is very nice, my main gripe is that without omega weapons there is no M missile option that feels good.
With the TPCs+ballistics staying at range is strong, but then sabot/harpoon will be wasted and anni is meh. Maybe get reapers, they are flashy at least

Deciding factor for me is it'd be the only 7 burn ship in the fleet it goes in, so in the end I just take something else.
This whole does armor tanking exist in any form even it's not helpful/useful/optimal is a red herring.
With high armor shields can be dropped in the middle of a fight and weapons still work at full output.
The AI can't use it with existing mechanics. It's only helpful for Player piloted ships. That's what this was was about.
You wrote that current low tech design fundamentally can't work with the current AI, and that AI literally can't use armor to gain an offensive flux advantage.
AI can use armor, and the numbers can be massaged to make high armor+ballistics/missiles as strong as you want (see the 500000 armor example).
The shield-dropping behavior existing is important for the big picture. Not a red herring, and you brought up "AI literally can't trade armor for flux" to begin with.