OK, this is somewhat embarrassing. We're playing at Apprentice, and we've been doing so since well before 3.0 - at least since the Momir Basic/Draft/Testing options appeared.
This should have been fixed as part of
this bug, where it was discovered that whoever it was that repurposed the difficulty selection into those options didn't get it quite right - the intended hack was to relabel the difficulty options, set the game mode according to the AI skill level (internally, opponent_skill), and then force opponent_skill to Wizard, but they were looking at and changing the wrong data. What I did was to 1) make the dialog in Magic.exe change different (unused) data instead of opponent_skill, and look at that value in C to pick the game mode; 2) track down and remove the places where Magic.exe reset opponent_skill, so that it wouldn't change whatever we set it to in C; and 3) made it so playing at Apprentice difficulty no longer forced the human player to always win the start-of-game coin toss (since that happened before the earliest opportunity (at that time) for us to set opponent_skill in C).
The screwup I made was in 1) - when I replaced the old system that tried to read the dialog results, I removed the nonfunctional attempt to force opponent_skill to Wizard. The funny part is that that attempt
would have started working if I'd left it alone, since I updated the C definition of opponent_skill to refer to its real location in Magic.exe. Ugh.
I've put in an option to set difficulty level in config.txt - like I should have done in the first place - and defaulted it to Wizard. For real this time. The good news is that on modern computers, it has much less of an effect than AiDecisionTime.