P.S.: Steve, I have checked your input from above, and I can’t confirm the findings. As usual, I have to do it practically, as a scene file works or it doesn’t. This is easily shown with a short screen-capture. I color the text page temporarily with a different color for demo reasons, which is just to create better readability between the paper-page and the text-page.
I have ignored the alert about the missing plugin, I assume it delivers just the information for the Bend parameter. Let me know if that is wrong.
I hope the Reverse Normal demo shows that this wasn’t the cause. Anyway, AO works with Normals, as a normal map can demonstrate easily. But the geometry is key of course.
This afternoon I checked this practically. Still, I check everything in scene file form, as things might change and I don’t like to answer from memory. I edited my post above, as I had, in fact, replied without directly checking it in Cinema 4D directly. Since you saw it working, I thought fine …, but it was nagging on me, something was not sitting right. What showed up as a solved problem was, in fact, a result of your change, but it pushed the polygon below the other. Not visible any longer, hence no problem anymore.
So here is the screen capture and I hope that chapter is cleared now. (1min)
https://www.amazon.com/clouddrive/share/4GNs5K0xIpybU7ykoBAfDl2XLoxJiUIY2hDCNIYGkLD
As a side note: The AO is a “geo-mechanical” effect, not anything based on the light-emission of any source whatsoever. I know that people love to use it. Personally, I love AO if it is calculated on GI, etc. the fake one, not so much. It needs to be handled with great care to work positively.
ENJOY