It works, it’s just grayed out.
You must click on the quick reply for this message that is on the lower right of the users post you want to reply too. The image looks like the one below. This makes more since so now it will know what post you are replying to and will quote their post if you choose too.
Edit posts is part of the new system where it wont require you do go to a new page to edit your post. This is a great benefit to the server and the user.