I rarely cite CIS for anything. I find their work to generally be heavily biased against anything related to immigration. However, they did some number crunching in 2021 that illustrates a useful point on AAO appeals. Namely, that they are rarely successful. They analyzed AAO appeals for 3 categories of petitions (TPS, H-1B and immigrant petitions for alien workers). Collectively, appeals were sustained 8% of the time.
Weighing that low success rate against the fact that an AAO appeal gives the government an opportunity to clean up their administrative record by affirming the denial more cogently and the appeal could take months, it frequently makes sense to skip the AAO, lock the government in to defending a poor decision and go straight to federal court.
If you are going to fight the denial, fight it when the administrative record is most in your favor.