Why does it matter if the AI is "cheating"? There's nothing inherently virtuous about symmetric advantages, and Civ is already highly asymmetric in its fundamental design (map generation, spawn locations, faction bonuses). If you wish you had the option of facing a human-like opponent without inherent advantages, that's fair. But it's entirely unfounded to claim that giving an opponent advantages is somehow intrinsically illegitimate. It's a game, the nature of the challenge is an extraordinarily broad design space.

I think there's a simple issue to sum up the problem - implementation details should be hidden from the user. But AI systems that rely primarily on excessive cheating become a game where knowing their implementation is essentially 100% of the strategy because overcoming such an unfair gulf is basically impossible without breaking the AI. This lends itself to awkward strategies that should not work, but do. And it simultaneously also makes many aspects of the game basically red herrings in that they simply don't work. And that's seriously (!!!) a shame because the designers in Civ have done a great job of creating lots of really interesting systems, but these systems have gone far beyond the AI's capability, which is just compensated for by extreme cheating.

It can also lead to the appearance of buggy behavior if you don't understand the implementation. For instance I think Firaxis did a much better job of the AI in XCom (in that it's enjoyable to play against at least), but there too you kind of need to understand the implementation or you might wonder about why, for instance, enemies seem to be magically teleporting around the map. The answer, of course, is that they indeed are.

Of course creating a non-cheating AI that's competitive against skilled humans is extremely non-trivial. But if you at least work on improving the AI you can tune down the amount of cheating necessary to create a challenge, which means the experience can feel much closer to 'organic.'

Because it becomes very not fun to play with the AI when the unfair boosts make it very difficult to win without just cheesing it in ways that exploit its predictable stupidity.

It matters because it becomes very quickly obvious. And the moment that it becomes obvious that you are not playing against an opponent that tries to use cunning and strategy, but merely an equation - a puzzle - which you have to solve, the entire house of cards comes down. Puzzle games can be fun, but the very people in this thread are arguing that CIV games are not about being a puzzle, but about roleplaying a civilization. There's a puzzle aspect of course, but a blatantly cheating AI is just a puzzle and nothing else.

It matters for the same reason that people don't want to play against a human-like AI, because that AI would be a double crossing bastard who tries to win at all costs. They want to play against a roleplaying AI who tries to appear like Ghenghis Khan or Tutanchamon. But if I see my sworn enemy Attila the Hun spawn in an endless stream of battering rams out of thin air, and yet is so utterly incompetent and dumb that it cannot navigate a simple pass between mountains, that's a worse transgression against my suspension of disbelief than if he was just plain bad at the game.

Concerning cheating - yes, AI agents cheating against the player is universally disliked. Players quite like game AI that cheats in their favor. For example, in a fight with a group of AI opponents, only one would attack you simultaneously (we call this tokening/ticketing) and at a DPS generally lower than yours (through reduced accuracy, mini-cooldowns, and imperceivable timing tweaks between attacks, or more in-universe reasons) so that you can beat them all (even if the agent has the same weapon and loadout as you, and even if their stats screen shows higher stats!) There are also modifiers to how AI characters in traditional third/first-person games move and escalate when they are off-screen, as the players don't take well to being surprised by an enemy that emerges from off-screen close to them, even when it's plausible (Cyberpunk 2077 police). It is super cheatable, and many players end up unconsciously using these techniques, but they consider it "fair" and fun :) There are a lot of these tricks game developers do to make AI cheat in the player's favor. This isn't true for some titles meant to be hard, but it is typically true in AAA. Meanwhile, AI cheating against the player is considered very undesirable.

Firaxis might simply be balancing with formulas like y = mx + b, where the AI starts with a bonus b and gets better at a rate m through the age/game. I am only speculating, but perhaps they want the AI agents to seem harder at the start and make it more likely that the player overcomes them over the game. The feeling of dominating an opponent is one component of a design pillar in many games called "power fantasy," which players love. Dominating them from a position of the underdog is even more rewarding. Whether this plays as well as never giving the AI agents an "unfair" advantage is another question, but this advantage is a part of the Civ formula now. And there is a bit of inertia around design traditions in game series - many things are built around them that wouldn't work and would have to be redone if they changed. Perhaps they didn't want to spend time here.

One way or the other, this is a matter of balancing and not big-picture game AI design, architecture, or systems as much. So, if you are only concerned with cheating, then set all of what I said about these big-picture things aside. However, the comment I was responding to was more about the overall quality of AI systems.

I hope the context I've given anyone who reads this lets them communicate with Firaxis about the cheating problem in a more direct and constructive way. Saying that AI is bad overall from the perspective of system modernity does not express that sentiment and would confuse them. I am happy with the game AI in Civ in the same way most programmers are okay with bugs in software. It's not perfect, but I understand why it is this way. You can challenge the cheating in their forums if you'd like.