Thank you greydon. I deleted the Instructure cookies. Problem solved.

A few more details... without examining what the Instructure cookies do exactly, it appears there is some of file or object locking going on that failed to properly release that function. (power failure? improper shutdown?) I am only guessing. Our on-site ESS support team was able to verify the problem, it persisted for them, different computer on the other side of campus, that one assignment for that one specific course, and only the highlighter tool was affected. I am curious how a cookie on MY computer can affect the behavior on a different computer? I posted this in case someone else has the same issue, simple fix (delete cookie).