Diagnosis
The spindle lock pawl is either broken, jammed with debris, or the return spring has come off. It's a common failure point.
How to Fix It
Remove the wheel guard and spindle nut. Use a small pick to pry out the rubber button cover. You'll see a small screw. Remove it and the metal button plate. Inside, clean out any metal dust. Check the small steel pawl and its pivot pin. Replace the entire lock assembly (part 463642-1) if the pawl is cracked.
If That Didn't Work
The problem might be deeper. The shaft groove that the pawl engages into could be worn round. This requires replacing the output shaft, a major teardown.
Heads Up
Never force the lock button. If it's jammed, you'll snap the plastic housing. Always ensure the grinder is unplugged and the wheel has completely stopped before attempting to lock the spindle.