Modify the main loop to display current month / year

have you tried adding a second $query->set() ?

function loop_current_month( $query ) {
    if ( $query->is_home() && $query->is_main_query() ) {
        $query->set( 'monthnum', date('m') );
        $query->set( 'year', date("Y") );
    }
}
add_action( 'pre_get_posts', 'loop_current_month' );

This should get all the posts from the current month or this year, note date(‘m’) and date(‘Y’)

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