I've stuck with this useless kobold in 2nd chapter of SoU and his AI is super terrible, he never attacks and when finally manage he does 2 attacks and than doing nothing even being attacked for couple of turns. The worst part is when he cast invisibility, he simply staying invisible and doing even less than before. I remember problems with AI in original game, but at least cleric elf who was caster aswell used her spells well and attacked with no problems in melee. Giving him orders through radial menu usually doesnt help, maybe there some tactic command like certain distance with being defensive or smth to fix him?

From memory, you can talk to AI and tell them to either 'Cast Spells' or 'Melee', or something similar [I pretty much never use henchmen but i remember something similar to this].

It could be hes currently in 'Cast Spells' mode. If you want him to tank, maybe talk to him and an option might come up suggesting for him to be more aggressive.

The only option in SoU is either defend me or attack on sight, in both cases once i enter combat he should do everything. Original game had option to use either melee or ranged weapon.

He casts spells and sometimes even trying to attack, but as i said he simply freeze after doing few attacks, i think once his spells are exhausted he start being normal. It was common bug since original game but with him it even worse. Caster henchmans sometimes have difficlty to cast a spell stopping it cast for no reason. Only henchman who was acting good as spellcaster was elven cleric, she always casted spells with no problems and assisted in melee.

Any of these mercs with spellcasting can be a pain but there are ways to minimize the annoying stuff.

First, remove any usable melee weapon(s) from his paper doll AND inventory. Either sell them or hold them. Give him an xbow. For some reason, the AI won't have him self-buff much with a ranged weapon. Don't ask me why. Oh, almost forgot.... remove any scrolls or wands he might use, too. Dunno if he tries to use them in SoU but he does in HotU. Spammed a wand of lightening and drained all 50 charges in a single battle. I'm serious. It was ridiculous (and expensive. could have sold the stinkin wand!).

Next, just before an encounter, ask him to cast every buff in his list first one-at-a-time (you choose each) on your toon, then on him. I forget what all spells he uses (bard ones obviously but which dunno). Keep asking him until the list runs out. Steer clear of spells like Invisibility that will cause problems. Repeat the same spell over-and-over if necessary. I know even this sounds like a royal p.i.t.a but it only needs to be done once until next rest-up.

As a side note, I figured this out in HotU where Deekin kept casting Balagarn's Iron Horn (or whatever it is called) at the enemies I was trying to melee and kept knocking my toon on its bum for a round each cast. Very annoying. I was ready to dump him but he's the only merc that goes through the entire expansion so what can you do?

This method works in SoU and HotU and for other spellcasters as well. HotU has an improved interface so you'll just need to stay patient until that expansion. But SoU control at least gives merc inventory so better than the OC in that sense.

Worse case scenario: if none of this helps at all, install Tony K's Henchman AI and Inventory. It takes a while to understand all the adjustments that it can make but really helps eliminate most of the problems.

You can disable henchman spellcasting from the radial menu even if there is no option in the tactics dialogue.

Right-click on Deekin, select the Henchman commands option (upper left, I think) and click the icon that says "toggle spellcasting." It should stop all spellcasting, leaving him to simply use his melee attacks. You can still make him cast buffing spells through dialogue.