Not that I'd expect the team to do so, but I'd imagine the AI could be improved by adding to the unrealscript files that govern their actions. Do people really think that, say, Mass Effect 2, had to make changes to the UDK source code just to get enemy AI to get behind cover? I think it's perfectly possible given the limitations of the engine, just not something that's necessary or in the spirit of Renegade.
Also, to add to my comment about 5 seconds not being enough time to return to the battlefield... it seems that there is also an issue with when the "get back on the map!" state gets activated/deactivated. Walk up to the border of a map where you know you'll be out of bounds soon and take a single step off the map. You'll notice that it will actually take 3 steps to get back on the map, not just 1.
-edit: I've been playing some more and it seems that the dip in framerate seems to correlate with too many smoke particles being rendered. You might want to lower the number of shader instructions for that material given how you use that particle for pretty much everything, including when bullets hit dirt.