I think I missundertood you:
– Do you not want to display taxonomy terms as results? – in this case, make sure that on the General Options -> Sources 2 panel there is nothing selected: https://i.imgur.com/dUFVT9z.png
– ..or do you want to exclude post type results, based on what taxonomy terms do they belong to? – the option you are adjusting is for this case, but I’m not sure if that is waht you want. If yes, then I would rather recommend just choosing the category you want to include, instead of excluding everything.
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