It does light. You just need to get further back. We got some and shot it last year. We were nervous about shooting it in the woods and actually went up on a wet day. Inside of 80-100 yards, it wouldn't light in flight. When we got back further, we started to see the red lines. We also got lots of red glow in the backstop after impact, so the phosphors were definitely lighting. It would be much more fun on a 200+ yard range.
I don't know if this is by design... perhaps its to protect your position? Someone more familiar with military ammunition would be better able to speculate on that.
We saw a few bright red ricochets, too, so shooting this stuff in a dry forest would be ill advised.