I have that option turned on. Makes no difference.
Indeed, I think I've figured out how to provoke the behaviour in any app. It seem that Alfred doesn't handle the DELETE key properly (not BACKSPACE).
Pressing DELETE causes Alfred to stop recognising snippet keywords until you've typed as many characters as times you pressed DELETE or enter a "separator" like SPACE, ENTER etc.
So, if you delete a selection using DELETE (as I habitually do), Alfred will not expand snippets. If you use BACKSPACE (as people with little keyboards that have no DELETE key presumably do), it works as expected.
