Are you on time? Or in time?

Is it on fire? Or in fire?

Are you on point? Or in point?

Are you waiting on line? Or waiting in line?

"On" is more correct, as it's the state of being queued up. Waiting on line is a state of being that only exists logically, not physically. Are a series of people pointed in the same direction a line? Yes, but only mutually agreed upon in our heads, not physically measurable. Being queued up is not a thing — you cannot touch a state of being.

"In" is tyically very specific and references a physical location within an actual thing. Being "in" line would be equivalent to physically dipping your hand into a painted line. You can physically locate and measure a painted line.