The Echo notifications popups have a link to mark all notifications as read but they only mark all currently-displayed notifications as read. Since the popups don't show all notifications, users with a lot of them have to "mark all as read", reload, "mark all as read" again, etc in order to actually clear their notifications.
By contrast, Special:Notifications has menu option (under the cog) that marks all notifications as read in the selected wiki.
The "Mark all as read" link in the notifications popups should mark all local notifications of the popup type as read. The popup type refers to the first popup containing "alerts" and the second containing "notices".