In both 6.9.1 and 7.0.1:
The "Animated Materials" option in "other effects" menu in scene view does nothing. It has no effect on whether or not animated materials actually animate in the scene view. If shadergraph is open with an animated shader, they will animate; if it is not they (usually) won't.

Steps to reproduce:
1. Create a new project
2. Add the LWRP or Universal Pipeline Asset and plug it into the graphics settings
3. Create a sphere in the scene.
4. Create a new shadergraph
5. Set up the shadergraph shown in the first attached image. (Any shadergraph with time will work, but this one animates quickly and is good for testing)
6. Create a material and assign the shadergraph you just created to the material.
7. Assign the material to the sphere.
8. Make sure the shadergraph window is closed and that the material is not selected in the asset folder window or inspector.
9. Go to the "other effects" menu at the top of your scene window (it's near the middle, two stacked parallelograms and a star) and toggle "Animated Materials" off and on again.

Expected result: the animated materials will activate or deactivate when you turn the Animated Materials option on and off.
Actual result: The Animated Materials option does nothing.

Note: this is especially frustrating in 7.0.1. In 6.9.1 there is a workaround where having an animated material selected in the inspector will make them animate in the scene; in 7.0.1 the only way for them to animate in the scene is to have a shadergraph window with an animated material open.