All my servers have it set in their gamemode_*_server.cfg and it works as intended.
Check to see what happens when you simply type it in console, specifically if it changes back.
Sounds to me like a plugin is enforcing it to be "1", because by default it works, especially without the need of sm_cvar.
Disable your plugins and see if it works, as that's a quick way to test if it's SM related at all.