Civ 7 Diplomacy Isn't Broken - You're Just Looking at it Wrong

People keep complaining that the AI settles near you then "hates" you. But that's not what's happening. Your mutual relationship worsens, which is how diplomacy works. They need a reason for war, and so do you. Another example, if you detect them spying, your mutual relationship can drop, but that doesn't mean they hate you. It's just a natural response to espionage.

As for the AI overreaching and expanding too aggressively, it gives you a good reason to go to war. It opens up opportunities to take advantage of their weaker border.

Your not meant to be friends with everyone-Civ 7 is about managing your relationship even if they're being aggressive. It's up to you to smooth things out if you want to maintain the peace, and that should be a challenge in itself.

Edit. I'm not excusing settlers going at the other side of the map. That will hopefully be fixed next patch.