V3.1.5.1 Win-10 64 bit.
FYI; not a big issue, just shedding new light on an old one.
Not the first mention of the Hide Markup setting being ignored (see e.g. this from a couple of years ago) but my experience adds a wrinkle: it only applies to scrivenings.
I noticed while reviewing the MS by scrivenings that I have to apply Hide Markup twice to actually hide what I thought already hidden. I looked at the menu and found that the item is initially checked, becomes unchecked, then is re-checked, i.e. Scrivener is remembering the setting, but is not, apparently applying it to scrivenings.
If e.g. I close and reopen Scrivener on an individual document, the display reflects the Hide Markup setting.