This feature still works as described, since with MIDI beat clock enabled for Kontakt it will be synced properly.

First, you need to enable Midi Beat clock for Kontakt. This can be done in Pro Tools Midi Setup>Midi Beat Clock. Then make sure that your Kontakt instruments are set to the Beatmachine or TimeMachine source module. For external sync to be active you must click the % sign (next to the speed knob) and choose a note value. Whole note means that the loop is one bar.