I had a bug report files for this and received some helpful information that I thought would be good to update here:
“While it may seem counterintuitive in this particular case, what you’re seeing is actually expected behavior. “Ignore empty constraints” refers to set inputs, such as dropdowns. For example, a dropdown will typically default to the placeholder option rather than an option of actual value. If a filter is set on that dropdown’s value, the “ignore empty constraint” option will allow the filter to ignore that empty dropdown value. States, on the other hand, have no real constraints. While your state’s list may be empty, it is not technically an empty constraint and will not be ignored.”