Hey gc104 Steve H. here.
The position of the gate in the insert signal flow is of utmost importance. In order for this splash effect to work, the sidechained gate must be inserted in an aux channel in the first (topmost) insert slot. In that position, when it the gate opens (by the bussed audio crossing the threshold) it allows the signal to pass through all the other processors in the the effects chain which starts from top to bottom.
However, if you put the sidechained gate at the bottom of the insert chain, then you will achieve the opposite effect: The audio will be processed by all the effects in the chain until a signal crosses the sidechained gate's threshold... this, I believe is what is happening in your set up.
So tell me, where is your sidechained gate?
P.S. I downloaded the above file and it works perfectly. However I noticed that the aux channel has 2 gates: one before and after the effects chain. Get rid of the one after and use the one before the chain (at the top of the insert slots).