AI OnAI Off
Yes, that change is probably what causes the event not to trigger.
I believe this issue is fixed in the current version (3.2 SP1), but it would probably be possible to create a workaround for 3.1 if migration to the 3.2 series is not an option.
That should solve your immediate problem.
However, if the Logon event never fires, then I suspect that the OnlineModule will not work as intended. A workaround may be to call the OnlineModule.SetStillActive(IUser) method manually.