Thanks! I meant to look into this yesterday but ran out of time. What about the other operators in this menu, do you think it's a problem there too?

Actually, it seems the real problem here is that we can't use the modifier from the context here, since that will be overridden by the "active modifier".
(compare the invoke functions for modifiers and grease pencil modifiers, where there is no active modifier).

I wonder if instead of this fix we should separate the "active_modifier" and "modifier" context data, similar to what we do for objects?

I have to be honest, I don't know the code well enough to have a good opinion about that.

From my current understanding, the active modifier is irrelevant in this situation. The "apply", "duplicate", ... operators either get called via the menu (which "knows" about its modifier) or via the shortcut (which gets the modifier with the cursor position).