Did you enable the rule Combat:UseIntervalAC in your rule_values table and set it to true? If not, then try that. Also, if you want mobs to land hits more often, you can always adjust their attack rating and accuracy.
I don't think AC effects how often you are hit, only how hard you are hit for on average. The main factor in how often you are hit is your defense/dodge/parry/etc skill levels vs the level/accuracy of the mob.
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