In the tpwcas.sqf script there are 2 parameters that can be set to enable this:
//PLAYER SUPPRESSION SHAKE. 0 = NO SUPPRESSION, 1 = SUPPRESSION.
tpwcas_playershake = 1;
//PLAYER SUPPRESSION VISUALS. 0 = NO SUPPRESSION, 1 = SUPPRESSION.
tpwcas_playervis = 1;
Currently those are set to 0 (enabled) by default for both Single play players as well as Multiplayer players.
So in the latest code (v301) no need to change anything to be able to know if it works or not.. just make sure the AI is shooting you but dont kill you..

---------- Post added at 20:22 ---------- Previous post was at 20:10 ----------
Hmmm, no good :-(
While debug ball color changing works according to expected suppression level this limits the amount of potential causes.
First we would need to know if stance changing commands like 'setunitpos "middle"' and 'setunitpos "down"' actually work on a dedicated Linux server.
I'm not able to perform some Linux debug tests with this within the next 2 weeks, but will have a close look at it asap.
Is the Arma dedicated Linux server really different from the Arma dedicated Windows server that such different behaviour could be expected?
Anyone any idea what could possibly be the issue here?