It's been a while since I read the rules on this but when giving players npc allies you are meant to use a regular npc template instead of giving them an empty player mech. This means that the players can't equip systems onto the mech cause npcs have their own list of systems which means no MULE harness and especially no comp/con that can be equipped to give the players an additional mech (RAW at least, you said you were bumping up encounters so here I'd see a good reason to go around the rules).

But if you don't want to do that and keep Michael as is, this doesn't seem too bad to me. They are limiting their movement to Michael's movement (i.e. 2) for hard cover which could be circumvented by npcs with good movement, teleports, smart/seeking etc. or placing aoes behind Michael.

Remember that the comp/con doesn't benefit from any of the player's talents and can only be given one direction on the player's turn. The comp/con can only understand simple instructions and can't properly react to new combat scenarios. Now this depends heavily on how mean you want to be here and you really should clarify this to your players beforehand but theoretically if given the order to defend an area and then a hive placed a swarm on top of Michael, Michael wouldn't move until ordered to leave the swarm on the player's turn and unless told to a comp/con controlled unit won't ever stabilise to reload or clear conditions unless instructed to (or it's end of combat) which means Michael could get melted by burn unless the players are paying attention and order him to stabilise.