Hey, No problem.
So, I think you first have to go to WooCommerce > Settings and click on Inventory tab and click on the “Enable Stock Management” check box; set Out of Stock Threshold to “0”; make sure “Hide out of stock items from the catalog” is unchecked. (This is for the WooCommerce plugin, not in the theme’s settings. See screenshot of my settings.)
Second, whatever product you want to display the Out of Stock ribbon for, you have to go in and edit the product: Go to Product Data > Inventory and select “Out of Stock” from the drop-down menu, and then save / update.
That should do it, I think…