The manual says:

‘line-height’
     A newline can have a ‘line-height’ text or overlay property that
     controls the total height of the display line ending in that
     newline.  *Note Line Height::.

If you set this for a bunch of lines then it properly adds spacing to those lines.

But if you have long lines in the buffer and   (setq truncate-lines t) then 
all lines will be properly spaced, except for the long lines, because the 
newline is out of screen.

Even if the newline is not on screen, it should affect the height of the truncated 
line, because that's why the package developer added line-height to the newline,
so the  line has some spacing.