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I think heal takes priority if it's in critical health. It will also use healing item if it is the hurt unit.
Otherwise, they will attack if within reach.

They usually attack your unit if your unit cannot counter. i.e. attacking an archer.

But it also is not guaranteed, I've seen them choose otherwise. Probably has to do with attacking the weakest link taking priority. Archers are kind of tough to kill in 1 shot.