The "Suppress Zeroes" option in the workbook properties that is referenced in the screenshot defines the default state of zero suppression workbook-wide. If that option is checked, then you can refresh the data in the workbook and click on the "Suppress zero" button on the OfficeConnect ribbon and the supression will work.
If the "Suppress Zeroes" option in the workbook properties is unchecked, then the "Suppress zero" button on the OfficeConnect ribbon will not work after the data refresh because the default state of the workbook has been changed. This also allows for selecting a different suppression setting to be set on individual rows so you can have parts of your workbook behave according to the workbook properties and then any select rows where you wish zeroes to be suppressed anyway.
In the simplest terms, the “Hide rows with all zeros” in Workbook properties ensures that suppression function is enabled. The “Hide Zeroes & Blanks” button on the ribbon is only a toggle to hide or show these rows.
I will attach a few screenshots below my signature to illustrate this.
Here, you can see that the suppression function is being turned on by checking off the two boxes under Row display.
In this screenshot, you can see that the toggle button “Hide Zeroes & Blanks” is pressed and the rows with zeroes are being hidden.
Here, we turn off the suppression function by un-checking the two boxes
Finally, here we can see that the toggle no longer works to hide the rows with all zeroes in them (Note: the “Refresh” button needs to be pressed for the above to take effect)