This bug was fixed in the package indicator-session -
17.3.20+17.04.20170403-0ubuntu1

---------------
indicator-session (17.3.20+17.04.20170403-0ubuntu1) zesty; urgency=medium

  [ Pete ]
  * Add phone indicator profiles.

  [ Charles Kerr ]
  * Handle "challenge" responses from login1 CanSuspend and CanHibernate
    calls (LP: #1674389)

 -- Pete Woods <[email protected]>  Mon, 03 Apr 2017 15:38:27
+0000

** Changed in: indicator-session (Ubuntu)
       Status: In Progress => Fix Released

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https://bugs.launchpad.net/bugs/1674389

Title:
  Session Indicator's "Suspend" button has no effect in Unity 8

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