I'm also having troubles with reaction fire, using r29222. I can set the reaction fire type and have them reserve TUs for it, but when an alien comes their way they just stand/sit there dumbfounded and die (or just waste their TUs)
Also, I'm not sure if these two events are unrelated, but when I move a character, and an alien has reaction fire he can shoot at people in his sights. Not a big deal. What is a big deal is that when he reaction-shoots my helpless 0TU guy, when ever anybody moves to come and try and save him, they get cut off by the reaction fire and stop moving. If I try to move them again the alien shoots again and stops movement. Repeat until motionless guy is dead.