Q: If the service is disabled, will the policies in the service not work anymore? I
Ans: Correct, if service is disabled this means it does not work with ranger authorization. Therefore no policies defined for the service will be evaluated/enforced at runtime.
Q: What is the the use of the the active status- enable/disable tab while creating a new ranger service?
Ans: You have the option to decide per-service if you like to use ranger for authorization. Lets say you have configured authorization for hive in metastore you can continue to use this if you leave it set to disabled. If you set it to enabled you need to configure the authorization at the ranger policy level.