Your offset is always set to 1.6 so when the character crouches it is no longer going to hit the character. You can either update the SharedVariable when the character is crouching or use the humanoid bone option for can see.
Isn't Offset for where the NPC/AI's "Eyes" are? The point of origin for where the raycast comes from the NPC to determine if it sees the player.
If so, why would that need to change when the player is crouching?
My assumption was:
Offset = AI's raycast origin
Target Offset = Target's destination for AI's raycast
Since these Offsets are in relation to the pivot point of the object (at the feet), I added 1.6 to the NPC/AI to line up with where the model's eyes are and 1 to where the Player's head is (the Target).
If anything, I would assume when crouching that I would need to reduce the Target Offset so the AI doesn't always see the player since he is not standing at a height of 1. Instead, he doesn't see him at all.
As for using the bone option, I never could get that to work for some reason - never detected it when enabled.