I am guessing that you are right-clicking on the dll and looking at the properties in Windows Explorer. Unfortunately, you're not going to see what you think you should be seeing. It displays File Version is correctly - that is the AssemblyFileVersion.
Product version is a little different. It doesn't show you the AssemblyVersion. I guess it might if the AssemblyFileVersion or AssemblyInformationalVersions don't exist in the actual assembly (although I haven't tried it).
If you have an AssemblyFileVersion and no AssemblyInformationalVersion, you will get the AssemblyFileVersion as the Product Version (that's what you are seeing)
If you have an AssemblyInformationalVersion then you will see that value in Product Version. Try looking at the TfsBuild.Versioning.Activities.dll. You will see a bunch of information that doesn't look much like a version number. It has
a time stamp of when it was built, a simple version number "1.5" and the ID of the person who requested the build (me). All that stuff is the AssemblyInformationalVersion value.
It's all an issue around what they decided to display in Windows Explorer rather than what's really in the assembly.
I built a simple version "reporter" app that is on the site as a separate download. If you use that app, it will show you the version values that you are looking for.