The same here.
I found that it did work with the standard theme Twenty Twenty.
So it must be a problem with the theme we are using.
Contact the theme maker.
Good luck.
Thank you for your feedback. Highly appreciated
​Please see the screenshot of the setting and activity stream from the dashboard.
Activity Settings
Post Comments are enabled. https://nimb.ws/CoSGJU
But in the admin, the dashboard activity stream says Replies disabled. https://nimb.ws/sWyvdR
I don’t have that “replies disabled”.
So here the replies give the impression to work but they don’t.
I think you should ask your theme developers.
Mine are working on it, I hope.
But of course first try to disable all plugins except BuddyPress and test, so you know that no plugin is the culprit.