Travis, the Agent inactive timeout / heartbeat enhancement is not in r12.0 SP2 and r12.1 but will be planned for future release.
You can try to alleviate the issue of AGENTDOWN notification caused by intermittent network failures by enabling these parameters in <DE_installdir>/conf/server.properties file, and restart the DE Server;
agentdown.notification.threshold.attempts=5
agentCommunicationFailed.queue.reprocessing.interval=30000
With this configuration, DE Server will make 5 attempts at 30 seconds interval before sending AGENTDOWN notification after agent communication failures (default is 1 attempt).