I have encountered this. If the line height is specified in the book's formatting, the Kobo software will not over-ride it, and you will not be able to change the line spacing for that book on the reader.
Typically such formatting is defined in a cascading style sheet. If the css includes instructions such as:
<p style="line-height:1.4">
then the Kobo will not change spacing. With (free) software like Sigil it is possible to edit the css of the book. I have frequently removed the line-height commands and then the Kobo will adjust spacing as usual. And since it's a Gutenberg book, if you mess it up you can just download a clean copy and try again.
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