It works, but it's kinda quirky. For example, as you use items, the number will decrease on the action bar. However, if you open and close your inventory, it bumps it up to 999 again. At least, that's how it seems to work most of the time.
I've also noticed that your dwarves are not invincible unless they're actually on your screen. If they are fighting off somewhere, they can and WILL die. Not big deal. Just jump to the battle are to put them on your screen. They'll become invincible again.