When I run the following, the hold statement seems to be ignored, and the output gets displayed as if the hold option wasn't even there. Is this an expected result, or is there something I can tweak to change this behavior?

SQL DB2
SELECT * FROM db2prod.TOT_CPNS_EMP_E
FETCH FIRST 3 ROWS ONLY WITH UR
;
END
TABLE FILE SQLOUT
PRINT *
ON TABLE HOLD AS TEMPSQL
END

try to add this to your request

SET TEMPERASE = OFF
APP HOLD foldername

Run the request and see if your HOLD file is in your foldername.

Results should not be displayed on the screen??

Remove the first END statement. It's terminating the procedure at that point.