I don't really understand the issue here. This behavior seems absolutely
fine to me. Why would a laptop disrespect power settings and suspend on
its own? If the power-settings is set to "do-nothing" then it simply
makes the display blank and lock the screen; if it is set to suspend
then only it should suspend....as shown in the image
http://i.imgur.com/0ebQv9W.png.

If it doesn't suspend even after setting it suspend, then it is a bug.
We must not temper anything in /etc/systemd/logind.conf.

All previous version had this bug that it used to suspend regardless of
the settings which was fixed in xenial.

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https://bugs.launchpad.net/bugs/1574120

Title:
  Notebook doesn't suspend when lid is closed after update to 16.04

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