There is a good 2 level difference between the pity AI where you can gain and lose trophies after 2 loses compared to the time out AI.
At my level, the time out AI tends to have level 25 boosted creatures where the pity AI has level 22-23 boosted creatures.
I almost never win against the time out AI but I actually did today with my random draw of 137 creatures. My team are all unboosted, having drawn 20 Alanqa, 21 Dracoceratosaurus, 20 Secodontosaurus and 21 Erlikospyx.
They did make a change to the AI’s where if you can take out two creatures before it takes out 2 of yours that they start swapping. Now they hit once before swapping, so hit-swap, hit-swap.
Sometimes, I’ll switch out to a winning team to get through the AI and back to the merciless real players if my team is really weak. I don’t complain. I’m merciless too.