HC I agree with much of your post but would caution that it is unfair to blame CAA and the regulators in general. The experts in these areas were in fact us. The Industry. In hindsight types where failure of the upper modes or indeed, the AFCS were reasonably expected, it was prudent to practise manually flown procedures. However, it took us all a while to realise that these policies were not suitable once the full digital age had arrived. You were undoubtedly a key voice in this change. I think it is important to understand that the regulator is simply a mirror, reflecting back what happens in the industry.
Still I feel EASA have missed the boat on this one. I am obliged to cover vortex ring and settling with power at each OPC/LPC when I feel much more should be made of the incipient hazards of poor application of automation. Just look at the many pages in the regs prescribing FW LOC (Upset) training. Nothing in there about helicopter AFCS except a few headline policy requirements.
We are in a better place than 10-15 years ago. However it has taken that time for us all to better understand how to fully exploit the new technology. I think we are still learning.
it is often much more beneficial to demonstrate to crews poor technique than to simply demand they apply the correct one.