First of all, the most similar question that I found is this Intellij IDEA: Breakpoint not being hit, and is shown greyed out but that is not the exact same case.
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Android app configuration was the problem for me. I had minifyEnabled true in debug section inside buildTypes in build.gradle file. I had to change it to minifyEnabled false. This change forced me to set multiDexEnabled true as it states in this post Android gives error "Cannot fit requested classes in a single dex file"