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Since it doesn't affect your fps, leave it on. :)
I am not the expert in game design and mechanics, but saying ambient occlusion does not exist in real life is basically saying that ambient lightning doesn't cast shadows. In other words, you are saying that shadows in real life are unaffected by ambient lightning and all shadows cast in real life have only one point of lightning.
AO increases accuracy of ambient lightning effects on a given object. For a character that can mean that there is less lightning under his/her armpits, or underneath a car. It 'occludes' surfaces or objects that are not exposed directly to a light source. It's actually meant the create a more realistic representation of lightning.
And do you play with it on or off in Dayz?