Click on the three vertical dots towards the right end of the formatting bar. Then, click on [ ] on the second row that appears. This turns on formatting. Voila! Now your formatting options are active (and no longer greyed out).
I did some looking about, it seems advanced editing is now disabled by default on mobile devices, because the advanced editor is sometimes glitchy on mobile. The logic is that most people don't use advanced formatting when posting from their phones... so anyone who does can enable it. I hadn't heard any complains about the old way though... so I'm not too sure about that