So am I right in saying that he is really a dry drunk atm, because if he was really digging deep into AA practices and working the steps he would not be doing this.
It's a pretty harsh judgement if he's going to AA. My first sponsor called it "trading up addictions" and it's very common for recovering alcoholics to seek other ways of relieving stress. Some get healthy addictions like fitness and become running fanatics. Thing is it takes a good deal of time (often years) for a program to kick in and real change to happen. Lots of people have difficulty with step four and it can take time. Alcoholics are addicts and of course have addictive thinking. Bill Wilson wrote that drinking is but a symptom of a much bigger problem.
Have you tried Alanon? It was a lifesaver for me, a solid recovery program that fosters changes in attitudes.
Regarding cigar smoking, I'm sure it's unpleasant to be around and you have rights as well. Perhaps ask him to avoid smoking at home? Big hug.