Is that AO or just a shadow being cast? Looks a little too hard edged to be AO.
That's definitely the AO. It shows even in places where a bright light is being shown on it, which does look like a shadow. Come to think of it, the lights don't seem to cast shadows anymore like they did in the first (except the PCs shadow).
I have the PC version and I can go to that exact spot and post some screens with AO on and off to confirm.