I was able to fold keywords like 'for' and 'if', but not the block using the 'function' keyword. I removed the atom-autocomplete-lua package and was able to fold functions after restarting Atom. There appears to be a conflict with this package.
Looks like it's an issue with language-lua. A comment after any keyword used for folding nullifies the folding effect. I'll bring up this issue with the correct package.
I was able to fold keywords like 'for' and 'if', but not the block using the 'function' keyword. I removed the atom-autocomplete-lua package and was able to fold functions after restarting Atom. There appears to be a conflict with this package.