\setuphead[chapter][alternative=middle,textstyle=\cap,numbercommand=\WORDS]
\setuphead[section][sectionsegments=section,align=middle,textstyle={\bf},conversion=R,numbercommand={\bf}]
\setuphead[subsection][numbercommand=,textstyle={\it},sectionsegments=subsection,conversion=n]
\starttext
\startchapter[title=Dummy chapter]
\startsection[title=Dummy section]
\startsubsection[title=Dummy subsection]
\input knuth
\stopsubsection
\stopsection
\stopchapter
\stoptext

The log says:

\endgroup

\22>:157>:middle ...headshownumber \strut \headnumbercontent \par \else \fakeheadnumbercontent \fi \begstrut \headtextcontent

\endstrut }

\strc_rendering_inject_number_and_text ...def \p_command {\headparameter \c!command }\ifx \p_command \empty \directsetup \currentheadrenderingsetup

\else \p_command \headnumbercontent \headtextcontent \fi

\strc_rendering_place_head_number_and_text ...}\useheadstyleparameter \c!style \setinlineheadreferenceattributes \strc_rendering_inject_number_and_text

}\fi \strc_rendering_stop_placement

\strc_sectioning_handle ...onditional \headshownumber \let \getheadnumber \fullheadnumber \strc_rendering_place_head_number_and_text

\else \strc_rendering_place_head_text \fi \dostoptagged \strc_sectioning_after_yes \else \ifconditional \c_strc_sectioning_hidden \strc_se...

\strc_sectioning_start_named_section ...de \currenthead \headparameter \c!beforesection \the \everybeforehead \strc_sectioning_handle {#1}{#2}{#3}

\headparameter \c!insidesection

...

I guess it's unrelated to Pablo's issue (\emph works again after the patch).