The exclusion appears to be working in my mock return. You might first review the qualifications for the exclusion:
With these in mind, if both of you and both of your pensions meet the qualifications, go back to the "Retirement" topic and verify the entries including the follow question that identifies a qualified plan.
Revisit the MD state interview and "Edit" the income section and "Edit" the "MD pension exclusion" topic. You should see the breakdown of the exclusion. Remember your social security is also subtracted from the maximum allowable exclusion for each of you.