I find that it works sometimes, but not at other times. For instance, I remember deleting a post of mine within a thread I created where I was the last one to make a post in that thread. I was also able to delete a reply in another thread created by someone else. But at other times, it didn't work at all.
It's an SMF bug, and theymos doesn't care enough to fix it, it's not a big deal.
Maybe it should be renamed to DO NOT CLICK and see how many times people click it.
I'd prefer it if it was only present when you actually have the ability to delete a post/thread while remaining hidden if the ability doesn't exist - i.e. the way normal forums are supposed to work.