Most often, this problem is caused by opening a document as Protected.
There are a variety of ways to open documents, and several of them are going to automatically trigger “Protected” viewing mode. Since this mode does not support any kind of Macro actions, the EndNote tools will grey. (EndNote CWYW functions in Word are macros)
The user may need to either Unprotect the document, or ensure they are opening the document in a fashion that doesn’t trigger protected mode.
Solutions
Word: File > Info (To check protect mode for current open document in Word)
Saving the document to the local machine, and then opening it will probably help.