Farkas is acting like a guard but lacking their dialogue choices

Solution 1:

Incur a small bounty in Whiterun (e.g. by walking up to a guard and punching them), and then immediately pay it off. This should convince Farkas to stop acting weird.

Some of the Companions are flagged as guards, and there are a variety of ways that both they and "regular" guards can "get confused" about whether the player has a bounty. Unfortunately, the Companions are also unable to arrest you, so this bug is particularly nasty when it affects them. In rare cases, it can turn the entire faction hostile. Fortunately, it's usually very simple to reset the player's bounty, by just incurring and paying off a "real" bounty.

(They will confiscate any stolen items you are carrying, and unless you have installed certain mods, they will also transport you to the Dragonsreach front door. So make sure you're prepared for that.)