Newer Duet boards have proper documentation (here and here), but I had troubles connecting this older one. Some clarifications to existing documentation are below.

Pin for BLtouch PWM

Connecting PWM pin of BLtouch should go to one of 4 PWM heater pins, which are (according to this post):

Pin	Heater / servo #
18	2
21	3
22	4
23	5

I went with using pin 21 (heater 3). Then, disabling the heater #3 and using servo #3 works:

M307 H3 A-1 C-1 D-1; Disable heater 3 (this is from config.g)

M280 P3 S120 I1; Test BLTouch. Using servo 3 (needs to be reverted with I1, when connected directly to Duet 0.8.5). S120 will cause it to extend/retract 10 times. 

Input 3.3v connection

This post mentions using resistor for input to Duet, as Duet works on 3.3v, while BLTouch produces 5v. However, Duet documentation says it should tolerate 5v (although recommends using 3.3v as some users reported issues with 5v).

End result