The Ship Complete feature currently works only for Bulk Item Fulfillments and not on the Sales Order level.
The Fulfill button on the sales order record will show regardless if Ship Complete is enabled or not under Shipping tab. It depends on the user's Fulfill Based on Commitment preference under Setup > Accounting > Accounting Preferences > Order Management tab > Fulfillment section.
We currently track under Enhancement 92833 the ability to enforce Ship Complete on the Sales Order Level and fulfill sales orders only when all items are committed.