The ignore list works like you think except it requires a software restart to take effect (so basically it will affect your next game session). This is because of how Ren'Py caches pictures. Also, some pictures update every game day so you need to skip one day to make certain pictures (e.g. profile pictures) go away. Finally, it was not working properly until a recent patch so make sure you haveYou must be registered to see the links.
Cheers for the insight. Had tried restarting too but now I now believe my own Game Settings were causing the issues - the option "Choose what to do when a girlpack has a low picture variety on a given tag (less than 4)" was set to "Only use girl pack pictures".
When toggling this to "Mix" I no longer saw the ignored images, though I did see mainly default. The girl I was testing this on only had 2 waitress photos, so I'm guessing the aforementioned setting overrides the ignored list if there are less than 4 images now available.
When trying on a girl with 7 waitress picks, keeping the "Only use girl pack pictures" and ignoring 1 (still providing 6 options) does remove said ignored pic from rotation.