When I use a Web Map from ArcGIS Online then this does work for me.
Stan, I am not sure why yours is not working but it should.
However, I am testing out the Local Layer Widget so my layers are coming from my ArcGIS Server not AGOL.
As far as I can tell there currently seems to be no way to exclude layers from the Legend when using Local Layers.
If anyone has any suggestions that would be greatly appreciated.
Regards,
Michael