1. On a dedicated server, run the test mission that has been attached to this bug report. Alternatively, here's a download link: https://www.dropbox.com/s/onprpweeqz99ofy/test11.Stratis.pbo?dl=0
2. Join in the slot labelled as "Test1". It's a test in which the AI is standing about 50 meters away down a street.
3. When the mission has started, open Zeus and spawn a CSAT rifleman next to the existing CSAT rifleman. This newly spawned rifleman will be local to your own machine. The existing rifleman is local to the dedicated server.
4. Pick up smoke grenades from the box in front of you and throw as many smokes as possible around the corner towards the AI.
5. Run around the corner. When the AI begins shooting at you, open Zeus and observe the AI. Notice how the AI local to the dedicated server begins shooting at you through the smoke like the smoke isn't there. The AI local to your own machine does not shoot and doesn't seem to notice you.
Repeat this test with the other playable slot, labelled "Test2". It's a test in which the AI is standing about 200 meters away down a runway. The results are the same. Just remember that you may need to sprint a bit (run left and right continuously) for the AI in the distance to realize you are there.
You can repeat these tests with the smoke spawned by Zeus. The results are the same.
You can repeat these tests also with smoke thrown by suppressed AI. The results are the same.