It's not just simply a choice between 'country loyalty' or 'game loyalty'. it's also about playing styles, how one plays the game. Do you play it as a flight sim only, and it's all about that white knuckles while trying to out turn that one opponent - or do you play it as a war sim/game?
I, for one, have been in the latter group for the most time in my AH career. For me it wasn't just about that single fight, it was about that battle and about the war (inasmuch as it shaped the battles. It was about the strategy, it was about the tactics. It was about correctly reading the enemy's intention, trying to guess his moves- Where is this darbar going to? How long did you say hasn't the Bish CV from P12 not been spotted? Where might it be by now? The (insert landgrabbing megasquad) are on with all three wings, where might they be going now? How can I best help with that battle and turn the tide of war?
That's why I was usually country loyal for months, or (in my later career) per tour or at least per map. With auto switch, that doesn't work any more, because you know too much. Of course, you can still be honourable and chose not to make use of that forbidden knowledge, but that limits you and takes all of the above away. Not to mention doing a long range mission to the enemy strats just to get asked to resupply them after you landed and autoswitch struck