Google Chrome	69.0.3494.0 (Official Build) dev (64-bit)
Google Eve

Steps to reproduce:

# Get to login screen
# Make sure focus is in the password field
# Go to Status tray > Accessibility and enable Highlight text caret
Expected: password prompt text caret is highlighted
Actual: no change

Workaround: minimize status tray, tab to put keyboard focus on another part of the UI then go back to the password prompt, highlight appears
 

Google Chrome	69.0.3494.0 (Official Build) dev (64-bit)
Google Eve

Steps to reproduce:

# Go to Omnibox and put text caret inside by focusing on it 
# Go to Status tray > Accessibility and enable Highlight text caret
Expected: existing text caret is highlighted
Actual: no change

This also happens on the login screen with the password prompt. 

Workaround: minimize status tray, tab to put keyboard focus on another part of the UI then go back to the text area, highlight appears

If you go to Settings > Manage accessibility features you'll see that the text says "highlight the text caret when it appears or moves". I feel that if a text caret is shown on screen (such as in a password field or in the Omnibox) it should be highlighted, even if it appeared for the first time before enabling this feature.