iMessage screen sharing is greyed out

Why is the iMessage screen sharing option not available? What causes it to be greyed out?

(see screenshot, green arrow)

Make sure the person is signed into iCloud (check System Preferences>iCloud). This fixed it for me.

Assuming that your contact is an iMessage user, a grayed screen sharing button indicates that he can't receive screen sharing at this time.

He may have disabled screen shaping in the Mac settings for instance, or he may be using his iPhone so he cannot perform screen sharing.

Ask your friend if he is using his Mac and ask him to enable Screen Sharing in System Preferences → Sharing.

If your friend has "Do Not Disturb" on, Screen sharing will be disabled. I found this out the hard way. To turn it on and off, you click on the slide-out menu button on the top right of the screen. (it will be greyed out if DO NOT DISTURB is turned on).