To better understand the problem, you have to probably look at the Schematic Flow of Krakatoa (click on Schematic at the bottom of the Main Controls rollout of the Krakatoa UI).
Basically, the data flows bottom to top and passes through various stages. You cannot expect to “see” the data from higher stages in the lower stages, just like with the 3ds Max modifier stack paradigm.
So you create a PRT Volume and it has only the data it could acquire from the mesh source. This data includes surface Normals, Texture coordinates and Color (if the Vertex Color channel is active on the mesh, it will be acquired, otherwise, the object color will be used).
Then the PRT Volume particles, still with Positions in object space, pass through the Modifier Stack of the PRT Volume. At this point, a Magma that tries to read the Density channel will find a default value of 1.0 there, and a Delete modifier will not delete anything because none of the particles has a Density of 0.0.
Then the particles reach the top of the modifier stack and are transformed into World Space by the transformation matrix of the PRT Volume. Then the material (if any) assigned to the PRT Volume is evaluated and replaces or modifies any relevant channels like Color, Emission, Density etc.
At this point the result can be displayed in the viewport. The particles have NOT gone through the Channel Overriddes yet, so nothing happening in the Override modifiers is seen in the viewport!
If you render, the particles now pass through the Channels Overriddes which are hosted by a dummy object and apply only to the data going out to be cached in the PCache. Once these modifiers (if any) are evaluated (note the particle positions are in world space at this point), the global channel overrides are also applied (if enabled) to replace the Color, Emission, Absorption or Density of the particles before they are stuffed into the PCache particle data stream. So everything in this part happens at render time and is not reflected by the viewports.
Finally, you have the PCache built and Krakatoa starts lighting and rendering the particles. The Lighting Pass and Final Pass Density as well as the Emission Scale controls kick in at this stage and modify what ends up in the image buffers. So these modifications can be performed on the already cached particles if LCache or PCache are checked.
Nowhere in my Clouds tutorial did I suggest using the Global Channel Override modifiers. We want to delete the particles in the viewports. The renderer does not care much whether a particle has Density of 0.0 or no particle at all (except for the memory and time overhead to store and process the particle, obviously), so the whole reason to delete particles was to visualize the cloud shape in the viewports and save a bit of time. The actual rendered image would be the same though, with or without deleting by 0.0 Density
I hope that looking at the Schematic Flow of Krakatoa will help you visualize the path of the particle data through the system!
