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.
You're right on the offset - it should be Target Offset. There are a lot of reasons why Can See Object may return failure so the easiest way to debug this is to place a breakpoint within CanSeeObject.OnUpdate and see where it returns early. It should get all of the way to line 141 of MovementUtility.LineOfSight