If the ragdolls are appearing in your spawn menu then the playermodels should appear in the playermodel menu. I do not know what is causing this issue as the lua file which makes the playermodels appear is working fine.

Perhaps the Lua file failed to download, or your gmod isn't running it for some reason.

I doubt that the addon is conflicting as the lua file is pretty specifically named. And since the ragdolls downloaded it's unlikely that the Lua file didn't download. To me it sounds like something may be wrong with your gmod but I don't know what that could be so I cannot help there.

If all else fails and you're unable to find why your gmod won't run the lua, you should be able to extract the lua file from the GMA by running it through gmad.exe in gmod's bin directory.
If you place the Lua file directly into the pathing garrysmod/garrysmod/lua/autorun it should run as intended.

I hope that this helps solve the issue, I don't really know enough about gmod's inner workings or lua in order to understand the issue. But hopefully the if all else fails method works.

Thanks. I added the Lua file directly to the autorun gmod directory. Now it works.