Highlighting for monsters shown due to extended monster detection and
for lava shown in black and white didn't work because that keys off
of 'iflags.use_inverse' (actually a macro for 'iflags.wc_inverse') and
curses wasn't enabling that window-capability option. To be fair, it
was probably unconditional at the time the curses interface was first
developed. It checked for whether a monster was supposed to be drawn
with inverse highlighting but wouldn't draw it that way because the
flag was always false. Inverse b&w lava is relatively new and curses
hadn't been taught about it.
Various other things such as pets (if hilite_pet is on) and object
piles (if hilite_pile is on) get highlighted with inverse video when
use_color is off, regardless of whether use_inverse is on or off.
That's probably a bug.
32e2d7cfc5