This appears to be the intended* AI behaviour when no "buses" are available, according to the source code governing passenger AI behaviour. Among other things, the game checks whether a sufficiently powerful road vehicle is available for use. Depending on what time your game started, and the pakset in use, such a vehicle may not exist, and the passenger AI will simply refuse to activate.
I reproduced your issue today with a fresh download and build of Simutrans Extended and the Simutrans Extended version of Pak128.Britain. When I set the starting year to a later year, I was able to activate passenger AI players. The original Simutrans code also appears to perform a similar test at first glance, but I would need to actually investigate and test with that code to be certain.
The solution is, to my understanding, to either accept the current situation, or wait for new development effort on AI to address it. Once AI logic is present that performs well with a wider range of vehicles, I imagine this restriction could in theory be altered or removed.
*By "intended behaviour", I mean the behaviour of the AI code itself, not the overall behaviour of the game. It would be nice if some explanation were afforded to the player when the AI fails to activate, instead of appearing to be broken. Alternatively, perhaps the tick box could just be disabled in the first place, whenever the conditions are unsuitable for it.