I’m unable to mute players while in a match. I’ve mainly seen this in Warzone, so I’m not sure if it affects Arena differently. When I hear someone I want to mute, and bring up the scoreboard, I can hear the audio cue that indicates I’ve pressed the mute button (whether I do so to an individual player or press “mute all”) but their incoming audio isn’t muted, and the scoreboard doesn’t show a line through their mic icon to indicate they’ve been muted either.
Additionally, while I’m extremely appreciative of the fact that 343 just added a mute button in the pre-game lobby, this button alternates (right stick click as I recall) between not working, and working but then chat audio is back to being un-muted once a match starts.
Again, I’ve only seen this consistently in Warzone, so I can’t confirm this as being multiplayer-wide.