I've tested this on hardy (i386) with all updates installed. The only difference I can see at a glance is i386 vs amd64 with regards to testing this.
I've tested with the same method as Kees, in that /etc/apache2/sites-enabled/000-default has:
RLimitCPU 2 2
The apache2 process was restarted with /etc/init.d/apache2 restart, with the same CGI script installed.
After hitting the URL, the process is definitely running without being killed, and the limit has been set on that child process:
:0:> sudo cat /proc/2089/limits
Limit Soft Limit Hard Limit Units
Max cpu time 2 2 ms
With this, the kernel doesn't appear to be killing the process quickly, however I suspect that this is due to system time vs CPU time - the example given spends a fair bit of time forking processes, but once it reaches 0:02.00 in top, the kernel kills the process, even though about a minute of wall clock time has elapsed.