Many of the potential applications of albumin-stabilized gold nanoclusters (AuNC) arise from the sensitivity of their luminescence to the presence of various ions and albumin-degrading proteases. However, the underlying photophysics and the mechanisms responsible for protease-induced quenching of AuNC luminescence are not fully understood. Here, we study proteinase K-induced digestion of bovine serum albumin (BSA)-AuNC conjugate under aerobic and anaerobic conditions. To this end, we adapt a Co(II)-catalyzed sulfite-based protocol enabling effective in situ deoxidization without deactivation of the enzyme. In the absence of proteinase K, the anaerobic conditions facilitate luminescence of BSA-AuNC reflected by a moderate increase in the red luminescence intensity. However, in the presence of proteinase K, we have observed a steeper decrease of emission intensity irrespective of whether the digestion was carried out under aerobic or anaerobic conditions. In both cases, the diminishing fluorescence occurred in phase with shifting of the emission maximum to longer wavelengths. These results contradict the previous hypothesis that protease-induced quenching of BSA-AuNC luminescence is a consequence of enhanced diffusion of oxygen to bare AuNC. Instead, aggregation of unprotected AuNCs and separation of nanoclusters from albumin’s side chains involved in energy transfers and luminescence-promoting electron donors may underlie the observed sensitivity of BSA-AuNC to protease treatment. Our findings are discussed in the context of mechanisms of formation and photophysics of BSA-AuNC conjugates.