While the activityBackgroundTint modifier is intended to set the background color of a Live Activity, it often fails to dynamically update, leaving the activity with an incorrect background. Replacing it with ZStack { Color(.background) .... } solves the problem, but this is a workaround. The activityBackgroundTint modifier is still needed, at a minimum, so that the "Allow Live Activity for the app" extension does not have the default color.

On earlier iOS versions Live Activity displays correctly according to mode set.  Can't find an opened issue for that version: iOS 26 device: iPhone 16