Oh i remember that one. It dubbed the alternative meaning of AI as "Artificial Idiocy". The approach was that that from the get-go the Pathfinder assumed friendly units weren't there to get a initial path and from then just went down an absurd list of every possible edge-case and how to get around whenever it bumped into something. So the initial path was just a dumb simplified path made with good ol' A* Search Algorithm and then whenever something went awry just try stuff like wiggling units around or if destructible just blast a path through it and so on. Start dumb, solve things via trial & error as they pop up till it looks smart-enough.
Modern Pathfinders still use similar approaches. Though nowadays paths can be planned out in nodes to make them somewhat more flexible and we have learned that just ignoring collision altogether doesn't take away from the experience, so a good number of games like battleforge just don't give a F about other units in the way and path right through them. Instead i believe it is applying some movement case checking on if their speed is affected and/or they are getting knocked aside by a larger unit. Only structures still have that old style of collision checking.
Melee is indeed problematic. Cause there you do still want it to at least look like collision is respected as a bunch of clipping melee units looks more jarring. So you get psuedo collissions where pathfinders steer the units to be adjacent and surrounding the target which tends to go awkward when the target is also moving around. While structures tend to have a predetermined unobstructed "slot" from where it can be melee attacked leading to awkward circling around.