Just reiterating that this issue is NOT solved as of 2025. First, the "mute/unmute" wording is no longer used in Canvas. Instead grades are hidden/posted. Second, this setting has no effect at all on whether students can see annotations made by their instructor (they can).
And worst of all: By default students get a spamming email/Canvas notification for each single annotation made by their instructor on a submitted assignment. As in a few dozen or more individual notifications sent to the student for a single marking session. There does not appear to be a way to mute this activity.
Here might be a related discussion:
https://community.canvaslms.com/t5/Canvas-Question-Forum/Annotation-Notifications-for-Students/m-p/5...