One could ask: what's the UX purpose of the "active anchor" indicator on the side navigation?

One answer I can think of: if a reader is in the middle of a long section, and the heading is off the screen, it can remind them which section they're in relative to the others.

This indicates (to me, anyway) that it's not a function of which heading you've scrolled to; it's a function of which section is on screen. If you use section-screen-area or something similar to highlight the active section, fiddling with the heading positions becomes unnecessary.

If you have a tiny section at the end that can never take up the majority of the screen, then when the user is reading it, the active indicator won't really be useful anyway.

I find such active anchors incredibly distracting. It’s like something blinking at the side (or top) just because you’ve scrolled a bit.

Regarding the purported problem they solve, maybe browsers should have an option to show current-heading information, similar to how IDEs show in which function or the like you’re in within the current source file.

or if you sticky the current header, thats 1 line of CSS