I started a new game with 324% difficulty and no DLCs. One of the AI companies was already producing 4 products by early 1994 - see the attached screenshot.Produce the most profitable product first and then move on to the others and not just focus on 2 products and quit expanding
So it seems that the suggested improvement is already working in the game.
By the way, the AI was programmed to have different preferences and capabilities. Like in the real world, not every single company will pursue aggressive expansion strategies. Some of them do and some of them don't. This leave room in the market for the player to explore and expand into, which is part of the fun playing the game.