I tried so set that attribute for the very outer LinearLayout of my dialog layout, and also for all others of which the AutoCompleteTextView is a (sub)child of. But it doesn't help. Since it's a dialog, it should be more of like window.setClipChildren(false), but unfortunately such a method doesn't exist for window. Or some flags like window.setFlags(WindowManager.LayoutParams.FLAG_LAYOUT_NO_LIMITS, WindowManager.LayoutParams.FLAG_LAYOUT_NO_LIMITS); but that all doesn't help.
Just a shot in the dark, but have you tried setting android:clipChildren to false on the view for the dialog atop your Activity?