Can you appeal to the associate editor when given unreasonable requests for revisions?

Not a journal editor, just a researcher.

I would respond to the reviews directly. You don't have to accept all the proposed changes; you can simply say "We feel this fundamentally changes the problem structure...." and give a paragraph or two on why.

That said, I might also reply to the AE. This can be very brief, something like "Our updated draft and responses are submitted. Note, however, that the two negative reviewers requested significant changes that we do not feel are appropriate; we reiterated our objections in our response." That way there is no formal appeal (yet), but perhaps the AE will review more carefully if the reviews come back the same as before.