Austro-Hungarian empire wanted to use south slavic minority as buffer towards Ottomans. They had right to form militia and defend their homes from Ottoman raiding parties and by that AH empire borders. As they proved effective every once in while they needed to give them small benefits, but truly they were second class citizens. They had no rights to decide about their status. Serbs as Orthodox had worse status for sure then Croats, bit both of them were minority in empire which had 50milion citizens. Conclusion would be, every empire needs resources and needs to exploit. Its was better to be minority in AH empire then in Ottoman thats for sure. I am on my phone, source of information : History of Serbs by Vladimir Corovic.