Thanks for using the Live Editor!
Actually, your workflow is expected to work. Unfortunately, there is a known issue that the 'Hide Code' state is not reliably stored with the document when no other edit opereation is made. We're working on fixing that bug.
As a workaound, you should try again to switch to Hide Code View and additionally make another change to the document. E.g. type a charachter and delete it. Then save. If you now close and reopen the Live Script, it should appear in 'Hide Code' mode.
With that, openAndConvert should export it properly without code.
Btw, I strongly recommend to not use openAndConvert and executeAndSave! Those functions were made for internal purposes and can be changed or removed at any time. Furthermore, they're not bullet-proof tested and may behave unexpectedly or wrongly.
However, since you're using it anyway, there is another solution for your worklfow. You can call
matlab.internal.liveeditor.openAndConvert ('Handout.mlx', 'test.pdf', 'HideCode', true);
With that additional argument, it always exports without code, regardless of the state of the document.
Again, be careful with using openAndConvert. Don't rely on its stability or existence in upcoming releases,
We're actively working on a public and well documented API to export Live Scripts programmatically. Stay tuned.
I hope, some of this helps.