[guided]We now handle the complementary density range
\begin{align*}
\alpha^2<\frac{2}{N}.
\end{align*}
If $\alpha=0$, then $A=\varnothing$, and for every affine hyperplane $H\subset G$,
\begin{align*}
\frac{|A\cap H|}{|H|}=0=\alpha+\frac{\alpha^2}{4}.
\end{align*}
So assume $\alpha>0$.
If $A$ already contains a non-degenerate three-term arithmetic progression, the theorem is proved. Assume instead that it does not. Suppose first that $A$ has density $\alpha$ on every affine hyperplane of $G$. For any nontrivial character $\gamma\in\widehat{G}$, grouping the Fourier coefficient over the cosets of $\ker\gamma$ gives
\begin{align*}
\widehat{f}(\gamma)=0,
\end{align*}
because every coset has density exactly $\alpha$. Also $\widehat{f}(1)=0$ by the definition of $f$. By [Fourier inversion on finite abelian groups](/page/Fourier%20Transform), all Fourier coefficients of $f$ vanish only when $f=0$ pointwise on $G$. Hence
\begin{align*}
\mathbb{1}_A(x)=\alpha
\end{align*}
for every $x\in G$. Since $\mathbb{1}_A$ takes only the values $0$ and $1$, this forces $\alpha\in\{0,1\}$. The case $\alpha=0$ was already handled. If $\alpha=1$, then $A=G$; since $n\geq1$, there exists $d\in G\setminus\{0\}$, and for every $x\in G$ the points $x$, $x+d$, and $x+2d$ lie in $A$, giving the progression alternative.
Thus in the remaining case, some affine hyperplane has density strictly larger than $\alpha$. More concretely, there is a linear hyperplane $V\subset G$ and a coset decomposition
\begin{align*}
G=\bigsqcup_{t\in\mathbb{F}_p}H_t
\end{align*}
for which the integers
\begin{align*}
m_t:=|A\cap H_t|,\qquad t\in\mathbb{F}_p,
\end{align*}
are not all equal. Let
\begin{align*}
m:=|A|.
\end{align*}
Choose $t_0\in\mathbb{F}_p$ such that $m_{t_0}$ is maximal. Since the average of the integers $m_t$ is $m/p$ and the $m_t$ are not all equal, the integer
\begin{align*}
pm_{t_0}-m
\end{align*}
is positive, hence at least $1$. Setting $H:=H_{t_0}$, we obtain
\begin{align*}
\frac{|A\cap H|}{|H|}-\alpha
&=\frac{m_{t_0}}{N/p}-\frac{m}{N}\\
&=\frac{pm_{t_0}-m}{N}\\
&\geq\frac{1}{N}.
\end{align*}
Finally, the small-density hypothesis gives
\begin{align*}
\alpha^2<\frac{2}{N},
\end{align*}
so
\begin{align*}
\frac{1}{N}>\frac{\alpha^2}{2}\geq\frac{\alpha^2}{4}.
\end{align*}
Therefore
\begin{align*}
\frac{|A\cap H|}{|H|}\geq\alpha+\frac{\alpha^2}{4}.
\end{align*}[/guided]