I own both the card game with all expansions and the ios app with all promos unlocked. I have two questions about one weird thing and one rules discrepancy.
1) Wierd - Why does the highest level of AI target themselves with wounds sometimes when it will end the game doing so, I have had a game where the AI was going to win and lost for themselves on the last chain. (Note: I did NOT have a shadow seven in play and have seen this multiple times)
I heard the lv3 AI has done that to good effect (it's won more than a few share of games that way it seems), but odd that it lost. I figured it had a "photographic memory" and was keeping track of Wound counts, but perhaps something in your Chain threw all of that off?
To clarify: Bad Smoke does attack, he just hits for zero damage and thus there's no reason dragging him to attack someone etc. This changes in later sets when effects are in play that boost a minion's strength.
I always figred that was a UI convenience, and that there may be some future way where it would make a difference and you'd then get to attack with Bad Smoke to effect.