somewhere amongst all of the scripts that make up OFP
The game is not written in the scripting language

This AI stuff is done within the game code (C++, or whatever), not with any scripts..
But it is pretty much like you put it, the AI spotted distance is rounded up/down with some criteria, it simulates the AI
estimating the distance (for one, other reasons exist most likely).
After all you can't tell
exactly how far something is when you see it, can you?
