Hi Chris,
The screen shot shows that the first reported metric value was 1 at 12:16:45 then at 12:17:15 it was at zero.
Before 12:16:45, there was no value and no metric meta data reported. This is a different state than not reporting with meta data, state 0. Since there was no meta data (agent/metric label), the metric grouping the alert is based on could not pick up the non-presence of the metric. The first matching metric value, based on the alert metric grouping would have been the value 1 at 12:16:30. The next value, being at 12:17:15, was reported as a zero, which would have been a decreased value and would not have triggered the alert.
I usually tell someone that asks if the APM will alert if the agent stops reporting, that if there is no data, there is no alert.
There are a number of tricks you can do to get an alert on a data point that does not report data, but you have to use a javascript calculator or a sum calculator to retrieve the metric and if there is no results of the query, then publish a metric with a value, then alert on the calculator value that represents that the original value is not reporting.
Hope this helps,
Billy