There is a 1205 error code buried in that message, and the text matches the 1205 ASE error message, so I think the deadlock really is happening in the ASE.
By default 1205s aren't output to the errorlog because the severity is only a 13.
We might try also using
sp_altermessage 1205, "with_log", true
to see if that will cause the message to be output when deadlocks occur.
This shouldn't be necessary as the options you have set on should result in output to the errorlog, but we might as well try it.
We can also test by deliberately causing a deadlock with two sessions:
-- using session 1
use tempdb
go
create table t1 (x int) lock allpages
create table t2 (x int) lock allpages
go
insert t1 values (1)
insert t2 values (2)
go
begin tran
update t1 set x = 3
go
-- using session 2
use tempdb
go
begin tran
update t2 set x = 4
go
update t1 set x = 5
go
-- session 2 should now hang, being blocked by session 1
-- using session 1
update t2 set x = 6
go
-- a deadlock error should now be raised, terminating one of the two sessions
-- and generating output in the logs.
--cleanup
use tempdb
go
drop table t1
go
drop table t2
go