Does the IRS actually process these claims?

The IRS has discretion in deciding how to process protective claims. Generally, the IRS will delay action on the claim until the contingency is resolved. Once the event occurs or the litigation is resolved, the taxpayer must provide any additional information necessary to process the claim, at which point the IRS will allow or disallow the claim. CCA 200547011, ECC 200848045
Filing a valid protective claim preserves the taxpayer\’s right to a refund, even if the statute of limitations expires before the contingency is resolved. If the claim is ultimately allowed, the refund will be paid. CCA 200547011