It seems that there are two issues:
1) Wrong detection oft closed lid
Can be worked around with the aforementioned settings.

2) Failure to suspend at all
Incorrect state, fan still operating.
Failure to wake up in any event.

I wonder if I shall file a different bug for 2.

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https://bugs.launchpad.net/bugs/1574120

Title:
  Notebook doesn't suspend when lid is closed after update to 16.04

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