It eliminates option values where all variants that include that value have no stock. If you have a single option class for a product then the net effect is to eliminate out of stock variants. If you have multiple option classes for a product there will still be option value combinations that can be out of stock.
To eliminate all out of stock variants it requires some somewhat complex UI changes that I haven't found the time to tackle yet. The two most common are:
- Build a list of all the option value combinations (i.e. variants) that are in stock and list them in a single dropdown. rei.com does this.
- Force the user to choose option values from the option classes in a fixed sequence (e.g first select size, then select color) resetting subsequent option class dropdowns to only those option values that have variants with stock. nordstrom.com does this.