I tried out the demo on OS9, and they work! Apparantly, the OS9 version won't hit test, emulated on OSX. And the Carbon version won't run on OS9 emulated, because all my attempts to set "Run in Classic Mode" in the info window failed. The check box wouldn't stick.
But anyhow, that is no problem, as I'll be distributing OS9 and OSX versions of my programs. And the Carbon one works on both.
ATSUI is supported under Carbon on Mac OS X, Carbon on Mac OS 9, and native Mac OS 9. The native Mac OS 9 version and Carbon Mac OS 9 versions are frozen (the native one at an earlier level); the OS X version continues to evolve.
I don't know why the demo doesn't do hit testing properly, but ATSUI is supposed to work on 9. I'd strongly recommend using the CarbonLib version.