The current behavior is that when "Count non-discountable items towards threshold" is enabled, it will include those items towards threshold qualification which are added to the discount line section as "Include", but have been either marked as "Prevent all discounts" (Under Commerce tab of Released products) or have another Exclusive or Best price discount applied.

The above behavior is according to Issue 449997 that can be found in LCS.

Proposed behavior: this parameter should allow for items that aren't included to count towards the threshold as well. (or a separate parameter) To allow for more scenarios to be applied in the system.