Query Exceeding Query Timeout on Linked Server and Working
Query Timeout setting affects only when the query is kept in waiting state for resources. This option doesn't affect the maximum duration a query can run and as per my understanding without custom logic, there is no setting which times out a query if it exceeds specified value.

MSDN also states the same. If the value is ZERO, SQL Server takes the value from 
Global query wait Option setting which can be configured through Sp_configure

Below is an excerpt from MSDN:


  In Microsoft SQL Server, memory-intensive queries (such as those involving sorting and hashing) are queued when there is not enough memory available to run the query. The query times out after a set time calculated by SQL Server (25 times the estimated cost of the query) or the time specified by the nonnegative value of the query wait