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I believe you have to grab the notification and sort of “drag it down” to see the interactive part. It’s not shown by default.

Long press on it to bring up the options. And drag to left for options to change notification preferences.

I just long pressed on a Slack notification and a “reply” text box appeared above the keyboard.

Thanks, I had no idea this was a thing on iOS.

I reply to slack notification on Apple Watch with dictation or canned message. Reply on phone just opens slack.