The button works, but in other way than you want. Currently it is not possible to set different bulk discount settings on different variations of the same product.
To illustrate what the setting means, let’s have two variations: A and B. Both have this bulk discount setting:
quantity = 10, discount = 10%
quantity = 20, discount = 50%.
If we have “Treat variations separately” checked, then when we order 10 times var A and 10 times var B, then 10% bulk discount will be applied on both cart lines.
If we have “Treat variations separately” unchecked, then when we order 10 times var A and 10 times var B, it will count the discount to 10 + 10 items, i.e. 20 items together and now the discount 50% will apply to both cart lines.
Therefore in the first case we treated the variations separately in the computation of the discount and in the second case we treat them as shared.
I hope it makes sense and I’m sorry that this is not the feature that you wanted.