Hello,

Navigate to Products > Attributes > edit attribute > Choose the disabled swatch. The disabled Swatch style is for the variants of the Products which are disabled not for the Out of Stock variants. So, you need to have the variant of the Product not checked with the Enable option on it and then the Disabled Swatch style will work accordingly. See these images for reference:
https://snipboard.io/BMehIF.jpg
https://snipboard.io/NbOzfP.jpg

If you do not want to check the option for every variation. Go to WooCommerce>>Settings>>Products. Then click Inventory. Tick the checkbox on “ Hide Out of stock product from Catalog”.

Best Regards.