Hiding out of stock products, and when not to
One switch, and a decision that is less obvious than it looks.
Under Settings, then Store, the Product display section holds Hide out-of-stock products. Its own description says what it does: products with zero available stock will not appear on your storefront.
What turning it on buys you
A shop that always looks stocked. Nobody browses past four greyed out items to find the two you can actually send. If you sell a small range and sell out often, this is usually the right setting, because an empty looking shelf reads as a shop that has stopped trading.
What turning it on costs you
The page goes away, and that is more than the product going away.
A product page that has been up for months may be the thing bringing people to your shop from a search. Hide it and that stops. Hide it and come back, and you are starting the page again rather than continuing it.
You also lose the message. A product page that says a thing exists and is out of stock tells a buyer two useful things: that you make it, and that it is worth waiting for. A product that has vanished tells them nothing, and some of them conclude you never sold it.
How to decide
Ask how long the thing is out of stock for.
Out for a day or two while you restock, and hiding it is churn: the page disappears and comes back for no reason. Leave it up.
Out for weeks, or gone for good, and hiding is right. A buyer who gets interested in something they cannot have for a month is a buyer you have annoyed.
Since the switch is one setting for the whole shop rather than per product, pick for the common case. If most of your gaps are short, leave it off. If most are long, turn it on.
The third option, which is usually the best one
Do not let things reach zero.
Most of the pain this switch manages is the pain of being surprised by your own stock. If you check your numbers weekly rather than discovering a zero when an order fails, this setting stops being a decision you have to care about. It is a tidy up for a problem better solved upstream.
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