This post is shorter than usual, as well as a few days late. I'll choose to blame the ice storm in my area.
Right. Malfunction was a gamemode in which the AI personality (or maybe core) sent to the station was subverted before being installed. The AI had one simple objective:
Do not allow any lifeforms, be it organic or synthetic to escape on the shuttle alive. AIs, Cyborgs, Maintenance drones, and pAIs are not considered alive.
Rather, that is how it is worded now, to eliminate confusion about IPCs. The spirit of the objective has remained the same, but the gamemode has not. A traitor AI will now have the very same hijack-esque objective, and like most hijacks, they almost always fail horribly in this objective. Unlike most hijackers, they aren't encouraged to use this to "do whatever." Perhaps more importantly, they are extremely easily ousted as "malf," (and we'll talk about that soon) and when that happens, they are then valid to the entire crew. This is very much unlike other hijacking antagonists, and it's a remnant of the old Malfunction gamemode.
Here's a list of ways the AI immediately becomes valid to the entire crew.
Of course, you never have to use APCs or CPU modules as AI, and if no one leaves on the emergency shuttle, you technically get a green flag on your hijack objective anyway. You'll have to protect the shuttle for three minutes because you don't have an emag, however. After not hacking APCs or doing anything loud for two hours, assuming your cyborgs haven't ousted you, and you start hacking a little bit before the shuttle, the best case scenario might land you at departures with several cyborgs, 150 CPU and white-hot plasma burning everyone in sight. Best of luck dealing with anyone that has a hardsuit and tools, as well as all the other traitors that want on the shuttle for their own objectives.
Most of the CPU modules are not friendly to stealth malf AIs, especially after the gamemode was removed and the modules reworked. Ironically, after the removal of the gamemode all about the malfunctioning AI, it has only become easier to identify when you need to blow the borgs and call the shuttle.
The reason crew is allowed to arm up, as stated before, is because the malfunctioning AI is a remnant of the old gamemode. The excuse in this mode was very similar to the crew fighting a blob, or xenomorphs, terror spiders. They are considered "station threats," and are balanced around the crew arming up and killing them. With the removal of the gamemode, the round no longer technically ends after the AI dies, but the shuttle will probably be called anyway.
The AI is still considered a station threat currently, because malf AI will always have hijack, and it is assumed malf AI will always try to doomsday. If we want to give AI players more versatility, the first step would be removing the guaranteed hijack objective, and treating it like any other traitor. The second step would be no longer considering it a station threat until it starts to doomsday. There could be stealthier modules, a way to temporarily hack borgs that wasn't a death sentence for AI or the borg. Or perhaps the antagonist is fine as it is, and we should just stop calling the shuttle after we kill the threat.