Why title_li =” not working

Because the parameter name is title_li and not title_li=. It also doesn’t make sense of using __( '' ), so I’d change that to just ''.

// When the args is a query string, title_li= works.
$args="title_li=";

// But when the args is an array, use just title_li.
$args = array(
    'title_li=' => '', // bad
    'title_li'  => '', // good
);