Activate Reference will change the active window to the Viewpoint that is currently the source of the Trace Reference. This active window, in turn, will use the same Trace Reference definition that was previously set, IF it applies and makes sense.
For example: Ground Floor is active and Floor Above (First Floor) is set to be the Trace Reference. If you activate the Reference, then the First Floor will be the active, and Second Floor will be shown as Trace Reference.
If the current Reference definition has no meaning in the activated viewpoint, then no Reference will be shown.
For example: The South Elevation is shown as Trace Reference under the Ground Floor Plan. If you use the Activate Reference command, the program will switch to the South Elevation Viewpoint and no Reference will be shown.