Hi—
\placeinitial seems to fail when there is a footnote in the paragraph. At least
\startparagraph
\placeinitial
\input ward \footnote{A footnote.}
\stopparagraph
only works when the footnote is commented out.
I am running lmtx [ConTeXt ver: 2023.06.22 LMTX fmt: 2023.6.26]
Alan