AO is not bugged, but unoptimized. It gets applied to the whole world and that kills performance. Just like Player Characters tax the engine the same if they are in front of you or at the max draw distance.

But here is a shocker for you: Water reflections are a shader too and I don't see it killing my performance.

You guys should probably stop with the "I am a developer", "I know coding" thing, you obviously lack the most basic technical knowledge.