I got no idea how it worked, but Stranglehold (remember that?) had a bullet time-centric competitive multiplayer and it worked really freaking well. You built it up like a super meter in a fighting game, and were able to slow everyone down and unleash bullet hell upon people while somehow still being at least partially vulnerable. It didn't break the game and somehow worked more or less like the single player bullet time, it was really impressive but even back then nobody gave a shit about playing it online (just like 90% of retail games multiplayer modes today) and the game itself was forgotten as Midway continued to flail.
It can be done, I don't know how exactly, but there's a successful model to follow out there.