Steps to Reproduce:
Does this issue occur when all extensions are disabled?: Yes

Currently activeLineNumber.activeForeground applies only when editor.renderLineHighlight is set to all or gutter.
same on 10.14.6 (Mojave)
This should be added on the documentation.
https://code.visualstudio.com/api/references/theme-color
Or be more prominent so that people don't go everywhere to find this specific issue :)
Thanks for this ticket. I upgraded VSCode and noticed that the highlight stopped working. Thanks @rebornix for clarifying that an extra setting is needed now.
Uhm... I spoke too soon. "editor.renderLineHighlight": "all", does bring back the highlight but it seems like a downgrade from earlier VSCode versions. Pretty sure earlier versions did not make the highlight box cover the line AND the gutter. I think it used to highlight the line number via color, and only draw the highlight-box within the code area. Oh well I'll use the all mode for now...
Edit: Waaah, I can't stand all mode. Seeing the line cover the gutter too is so ugly and distracting. Went back to line mode... I'll live without line number highlight-color...
Thanks @rebornix for the note about the extra setting.
I've been having a lot of difficulty lately figuring out what line my cursor jumps to when I use ctrl+f to find text in my code. Now my highlight color is back.
I can't figure out what renderLineHighlight is changing though. Might be my theme, but I don't see anything change no matter which setting I pick for it (besides my activeForeground color being respected again).
I agree with @VideoPlayerCode. I can't stand 'all' for the "editor.renderLineHighlight" setting. Things were much better the way they were before. I'm not happy that @rebornix closed the separate issue I created, https://github.com/microsoft/vscode/issues/86840, as if the matter is now settled.
I hope the bold line number can be brought back soon. I miss it.
Most helpful comment
Currently
activeLineNumber.activeForegroundapplies only wheneditor.renderLineHighlightis set toallorgutter.