I have same problem. Workaround doesn’t seem to fix it.
When I first turned on Featured Content, with the checkbox ticked ‘Don’t display tag on front end’, no featured content appeared on front page.
Unchecked the box, and it does appear. But now I can’t get it to go away on the front page, short of deleting the tag altogether from the posts. Ticking or unticking the checkbox now makes no difference, either in preview in Customize, or after saving change and reloading the front page.
Seems like a bug to me.
PS. I’m also using latest version 1.2.31
