The alert feat is pretty solid for avoiding those nasty surprise rounds, but it's not exactly foolproof especially in the later parts of the game. Here's how it actually works: you get this nice +5 to initiative and you can't be caught off guard while you're conscious, which is great since it stops hidden enemies from getting the jump on you

The thing is though it only works for the character who has it, so your buddies can still get caught with their pants down in an ambush. Something interesting to keep in mind is that certain scripted encounters, like that circus ambush later on, will actually ignore alert completely so you can't rely on it 100% of the time

I've found the best way to use it is to give it to your squishy spellcasters, since they're usually the ones who need that early turn to buff everyone up or control the battlefield. Pairing it with stuff like vigilance potions can get you some crazy high initiative rolls, and if you throw in some decent perception skills you're basically ready for anything that comes your way

For the trickier late-game stuff, you might want to scout ahead with illusion magic or keep some freedom of movement ready since terrain-based ambushes are pretty common. The feat starts showing its limitations against those tough honor mode bosses with legendary resistance, but it's still totally worth having in your arsenal just don't expect it to solve all your problems