As of 1.14, the AI precision is always very high, independent of the in-game AI difficulty.
First I've put the AI difficulty down to "Novice" and I noticed that they were still magically headshotting me from across 200-300m while standing. I went to "Custom" and set the Skill to 0.55 and Precision to 0.20 and it still occurs.
Something was broken during this refactoring with the latest patch.
As a workaround for now, if you use custom AI difficulty setting and set skill to 0.4 and precision to 0.2, it seems playable finally. Looks like the skill setting has more to precision as the precision setting.
One thing I noted is, that once you're behind true cover they stop shooting immediately, and as soon you pop out from behind cover you're immediately shot, no matter if you crawled to an offset position.
I noticed if you lower AI skill in custom difficulty to 0.4 with precision 0.2, it gets "better".
I believe this has been significantly improved by introducing the aiming error and suppression.