"Terms containing published, password protected posts will be shown in the list.
Terms containing only private, scheduled, draft or posts pending review will not be displayed in the list."
I have one post that I have tried to all the settings I could think of and it's still showing. I have tried: draft, pending review and private.
It's the only post for a specific taxonomy term so I get the term listed with a count of 1. When you click on that term I get not found.
I tried creating a brand new post with a new term and also tried to take an existing post that had been public and change the settings.