Delay: unclear on the concept

Conversation just finished:

"Your simulator delay variable isn't working."
"I tested it and it delays correctly. What's happening?"
"Every time I set it, I get a CURL 28 timeout error. If I take it out, everything works. You need to fix it."
"... Sounds to me like it's working, the response gets delayed like it's supposed to. You did remember to bump up the timeout setting in AD's config file to something greater than the delay you're setting, right?"
"..."
"If you don't, it'll always time out like that because you're making the simulator delay longer than AD's willing to wait."