The NPC AI (for NPCs, Thralls, Pets, Animals, Demons, Monsters, Beasts, etc) uses the same AI as this guy (more or less):

Walk within range, and it moves over and attacks. Well the green guy doesn’t have an attack, as it tries to bump you. But in CE no NPC reacts to you outside of following you. Instead of a 2d area, it has a somewhat 3d area to move around using basic pathing to get around objects (sometimes).
There’s no special logic about why thralls are bad fighters. That’s the problem. There’s no special logic at all. Anything that moves and isn’t a player has the same ‘AI’. And when I say thrall going forward I mean tamed and wild (unbroken NPCs).
There’s only three distinct differences. If you can even call them distinct.
The first one is basic combos. These are used by T1 and T2 thralls. Basically they have access to combos using 2 attacks. Either light and light, light and heavy, heavy and light, and heavy and heavy. I think they can use special (I don’t have the devkit open right now to double check). But they might not. Either way they choose these randomly. Oh they may only attack once too. Either light or heavy.
The second one is more basic combos. They can do the same as above, but can mix in 3 hit combos and 4 hit combos. So they may attack once, or twice, or sometimes three times, and if you’re lucky (and they don’t get interupted) 4 times. They can also do specials (block, backflip, weird shortsword hop, and kick), but these are random too, and never in reaction.
Finally what non-humans do. So let me explain how humans work a little (the attacks in the two points above). They pick a weapon based on situation (the ONLY intelligent thing any NPC does) usually based on its position in inventory, a ranged weapon or melee. And then they attack with that weapons combos, derived from a table, and randomly. Bows have two, light shot and power shot.
But for everything else… they have an assortment of weapons based on each of their attacks. Redmother has a bite, claw, firebreath, roar (does nothing), and tailswipe. Now, I don’t know for sure they do these randomly (I haven’t delved -that- far), or if they do them in some sort of order, but I suspect its somewhat random with maybe a weighted order. That way a the Redmother doesn’t just tailswipe spin over and over for a few attacks. They might even have cooldowns.
But at the end of the day, they do NOT have any intelligence (outside of thralls swapping to a ranged weapon from melee or vice versa), to what the player is doing. They have no clue what the player is doing other than distance and location.
They don’t see your attacks. They don’t know when you attack. They don’t know what armor you wear, what weapon you use. They don’t even know their own health level or when they are attacked or take damage.
Its why when you send in a thrall to fight another NPC, it looks like two blind drunk dudes flailing at each other. Because… well… that’s what it is. That’s what they’ve been coded to do. And all NPCs are like this. That basically Conan Exiles PVE in a nutshell.