Consider the following example:

\define \HighlightColor {red}
\definehighlight[RED][color=\HighlightColor]
\definelabel[AA][alternative=inright,headcolor=\HighlightColor,text=]
\definelabel[BB][alternative=inright,headcolor=red,text=]
\noheaderandfooterlines
\starttext
\hsize3cm
Is the label red?\AA

Is the label red?\BB

\RED{Is this line red?}
\stoptext

When run with --luatex, I get the colors I expect, as:

When run as lmtx, I get this:

All test were run with ConTeXt  ver: 2021.05.20 11:08 MKIV  fmt: 2021.5.20.

This worked very well for a long time, then became a problem a while ago, then it resolved, and once more it is a problem.

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Rik