I have the issue with Chrome in Win7, it happens only some times that i am writing and all the red dots disappear from sudden and i must write random text or delete text to make the spell check work again.
It usually happens when I enter some smilie / image / paste text in the editor. I'm not sure if this is chrome related, it happens in the 1.1 editor and 1.2, but it is frustrating to make the spell checker work again when it happens.
When tested with iPod4 (6.1.2) I could see the red dots of misspelled words. Also someone posted that it works for him in his iPad2.
Seems like this is just iPhone5/iOS6.1.4 bug/behavior. Double clicking on misspelled word does give list of corrections, it's just don't display the red dots. It does show the red dots in apps, such as the email app.
Guess this report can be closed as it's not related to XF, unless the staff would want to investigate that further.