They can handle it in the sense of using the feature, but they don't build multiple engineers so it only happens if they hire a stack as mercenaries or they accidentally end up on the same tile.
However if we assume 5 engineers building 5 separate roads is as good as one stack of 5 building one road which actually is mostly true, we can actually solve this by raising the AI engineer production limit to more than one per continent, we just need to decide what's a good number. In fact for this same reason, engineers not stacking is not relevant and has no effect on either the AI or the human player.
So if we follow that direction we can have more expensive roads but only if engineers themselves become more expensive as well (otherwise it's trivial to build more of them). Whether that's good or not though, is something to decide. I can't come up with a good reason for raising the costs so the safest bet is "if not broken, don't fix", and keeping the current range of costs.
However if we assume 5 engineers building 5 separate roads is as good as one stack of 5 building one road which actually is mostly true, we can actually solve this by raising the AI engineer production limit to more than one per continent, we just need to decide what's a good number. In fact for this same reason, engineers not stacking is not relevant and has no effect on either the AI or the human player.
So if we follow that direction we can have more expensive roads but only if engineers themselves become more expensive as well (otherwise it's trivial to build more of them). Whether that's good or not though, is something to decide. I can't come up with a good reason for raising the costs so the safest bet is "if not broken, don't fix", and keeping the current range of costs.