Is passive RFID range limited by the activation signal or the reflected signal?
The range is limited by the tags wakeup power. For example for some NXP UHF RFID tags its -20 dBm ish. The sensitivity of the reader is much much better than the "sensitivity" (=wake up power) of the tag.

Say you have a reader with output power of 27 dBm. The tag wakes up with minimum power of -20 dBm. The path loss is 47 dB. Now the signal gets reflected back from the tag to the reader antenna. The path loss is the same 47 dB. Then lets add some gain losses etc from the tag antenna. The power at the reader would be -20 dBm - 47 dB - antenna_losses. This is far above the readers sensitivity. 

For active RFID tags this might be different, because the RF power needed for wakeup is far far less than -20 dBm.