1 – Make sure there is no blank line at the beginning of functions.php
2 – The code must be added after the opening tag.

The next version of the plugin will include this among a few other new features (release will coincide with the release of BP1.3).

For now though, you can add the following to your theme’s functions.php file or your bp-custom.php file:

remove_action( 'bp_adminbar_menus', 'bp_adminbar_thisblog_menu', 6 );