Steps to reproduce the issue

Prerequisite

1. Make sure that following checkbox isn't ticked in WooCommerce settings
   

2. Ensure the presence of some out-of-stock products. If possible, rename an out-of-stock product to "1st product" to show it as 1st product in grid.

Steps:

1. Insert a Product Collection block into the Product Catalog template & save the template.

   • Verify that "Sync with current query" toggle is ON in inspector control for Product Collection block.
   • Verify that out-of-stock products are visible in Product Collection block

2. Check the checkbox & save the settings (Make sure it isn't checked when Product Collection block was inserted in 1st step):
   

3. Refresh the Product Catalog template in the Editor.

   • Observe that the "1st product" remains visible, contrary to expectations, since the "Hide out of stock items from the catalog" option was activated.

Expected output:
When "Sync with current query" toggle is ON, Product Collection block should follow the "Out of stock visibility" setting in Editor. Means, If it's set to "Hide out of stock items from the catalog" then out-of-stock products shouldn't be visible in Product Catalog template.

Note: This issue is on the Editor side only. It's working as expected on Frontend.