We tried doing that and it worked EXCEPT for when we try and do an internal transfer. Things are messed up during the internal transfer. There is an automatic generation of a payment in an internal transfer and the auto created payment is posted in the wrong account in the corresponding journal entry!!!

Please post a new question with details or contact Odoo Support and open a ticket - with either option describe your configuration (which accounts are set on each part of the Journal) and what you mean by "wrong" - what did you expect?). I just verified how internal transfers work and had no problems, the bank account is credited and the amount moves through the liquidity transfers account before being recorded as a debit in the destination journal. There are two journal entries that are automatically reconciled. Remember BOTH Journals need to be configured to skip the suspense accounts if you don't want that functionality for both banks involved.