I've had a lot of situations where I'm just mowing down an enemy squad in their base without really any reaction, except maybe soldiers trying to get out of the line of fire. They don't seem to be alerted when they see the bullets go by or even when one (or several) of their own gets killed. Ignoring the bullets would be understandable if they didn't make it clear by trying to move out of the way that they knew they were being shot at. What's really strange is that I can shoot suppressed fire at my own teammates and they're shouting all sorts of dialog.

They should be reacting to incoming suppressed fire that doesn't hit, and they do sometimes. I've also noticed the same you did that they don't do it nearly every time, so there is probably a bug there somewhere. I've seen them commenting "Incoming fire!" or "?" or just fleeing the area without saying anything.

They do have a small reaction time delay though, 0.5 - 1.0s I'd say, can't say off the top of my head, so that they wouldn't alert the area immediately a bullet hits ground near them, so you'd get your second chance to correct the fire.

Confirmed, there's a bug there. Got it fixed for the next release.