All options work for me except the unlimited durability option. I think that may work for guns but not for melee. It makes melee weapons always start off damaged (yellow) when I add them to my inventory and they still break if used enough.
the instructions mention to turn off several options when in the community bank to avoid problems. you might also turn them off when picking up weapons.
the durability option was made to work with the melee weapons.
best,
Cal