I use this add-on (and this exact same version) heavily on my own sites, and it works as expected.
This add-on respects if someone has the replying user ignored, and just because it sent notifications doesn't mean the email provider will forward it to their inbox.
Please confirm with your own testing (ie not a user complaint) that a thread you watch gets multiple emails without visiting the thread, as this will rule out add-on conflicts which are always a possibility.