Solution
Ensure you are selecting Tools >> Compare >> Compare VIs from the Front Panel or Block Diagram of one of the VIs you would like to compare. The Compare VIs tool must be selected/used from the Tools menu on a VI Front Panel or Block Diagram, not from a LabVIEW Project. If you try to select the tool from the LabVIEW Project, you will see a menu like the one below, with only the Compare VI Hierarchies option available.

If you have ensured that you are trying to use the tool from a VI and the tools are still greyed out, ensure that you have a LabVIEW Professional Development System license. This tool is only available through the Professional Development System.