Well... I moved the tags around and added Line of Sight. Dwarves were still being, invariably, suffocated.
I added [IT_CANNOT_TARGET_IF_ALREADY_AFFECTED] to the effect, in case the syndrome was being reset every time (with a mere delay of 1 and [SPEED:0] creatures) the Shadow embraced. The dwarves were still strangled to death, and the combat report showed an "embraces" at just about every action. I removed the tag.
Realizing a syndrome was an ongoing effect, I tried removing [IE_IMMEDIATE]. Dwarves: Still strangled to death. Combat Log: Still reports "Embraces". [IE_IMMEDIATE] returned to the interaction.
In the interests of checking that re-application situation, I upped the wait time to 15. Embraces occurred less frequently in the combat report, as expected, but no syndrome manifested. Dwarves strangled to death.
At this point, I tinkered heavily: I added an [I_EFFECT:CONTACT] (Immediate and on Target A), made the syndrome [SYN_CONTACT], and changed the range to Touchable (with no specified numeric range). Same results in the arena. Removed [SYN_CONTACT] just in case, added back in the 1-tile range, and tried again. Inexplicably, the first dwarf spawned won. obsidianizing the victorious dwarf (who had, of course, gained skill) and spawning another pair had the expected result: embraces, no syndrome, dwarf suffocated to being strangled.
I gave the Add Syndrome term an IE_ARENA_NAME. It appeared in the effect list, but spawning a dwarf with that effect resulted in a healthy dwarf just sitting there -- it seems that the problem exists within the syndrome: for some reason, it does not go, even when the game is told directly to interact.
After all the tinkering, my Raws look like this
[CAN_DO_INTERACTION:SHADOW_EMBRACE]
[CDI:ADV_NAME:Embrace]
[CDI:VERB:embraces:embraces:embraces]
[CDI:USAGE_HINT:ATTACK]
[CDI:TARGET:A:TOUCHABLE]
[CDI:TARGET_RANGE:A:1]
[CDI:MAX_TARGET_NUMBER:A:1]
[CDI:WAIT_PERIOD:1]
[INTERACTION:SHADOW_EMBRACE]
[I_SOURCE:CREATURE_ACTION]
[I_TARGET:A:CREATURE]
[IT_LOCATION:CONTEXT_CREATURE]
[IT_AFFECTED_CLASS:GENERAL_POISON]
[I_EFFECT:CONTACT]
[IE_TARGET:A]
[IE_IMMEDIATE]
[I_EFFECT:ADD_SYNDROME]
[IE_ARENA_NAME:shadow syndrome test]
[IE_TARGET:A]
[IE_IMMEDIATE]
[SYNDROME]
[SYN_NAME:shadow embrace]
[SYN_AFFECTED_CLASS:GENERAL_POISON]
[SYN_IMMUNE_CREATURE:SHADOW:ALL]
[CE:UNCONSCIOUSNESS:SEV:1000000:PROB:100:START:5:PEAK:100:END:20000]
[CE:PARALYSIS:SEV:1000000:PROB:100:START:10:PEAK:100:END:20000]
[CE:NECROSIS:SEV:10000000:PROB:100:START:15:PEAK:100:END:20000]