Why is "Devices" under bluetooth greyed out?
The label "Devices" is always grayed out, if that's what you're asking. Just like "Bluetooth: on" is grayed out. But here's what you can do to connect.

1.) Click the bluetooth icon in the menu bar while pressing the option key: ⌥ + click.

2.) Hover the mouse over the device that you want to connect, and click remove. This should refresh any old bluetooth logs.

3.) Then connect again.