My members are asking me why users they ignore still show up in various locations on the forum such as: 

• the activity streams
• the "recent posts" tab on the front page
• on profile page activity streams
• subforum threads started by an ignored user

Is this normal operation? Is there a way to change this?

Yes, all Ignore feature do is do not show the post content. It will show links everywhere. 

Hmm. Seems this would make for a good add-on then.

Thank you.