When \setfirstline is used to set the first line of a paragraph in a small-cap style, the line is mis-set. This does not occur with every font and input, but occurs with most fonts and many inputs. The problem does not seem to be awakened by other styles (emboldened, italicized).

\definefirstline[SC][alternative=line,style=\setfontfeature{smallcaps}]% or =\sc
\definefirstline[BD][alternative=line,style=bold]
\definefirstline[IT][alternative=line,style=italic]
\setupbodyfont[termes,11pt]% requires font with small caps
\starttext
  \setfirstline[SC]
  \startparagraph
    \input montgomery
  \stopparagraph
  \setfirstline[BD]
  \startparagraph
    \input montgomery
  \stopparagraph
  \setfirstline[IT]
  \startparagraph
    \input montgomery
  \stopparagraph
\stoptext

--
Rik