"Create disk image" disabled
You can not create a disk image of a APFS volume. Your closest two alternatives are as follows.


The first alternative would be to image the APFS container of the APFS volume. All volumes in the container must be unmounted in order to image.

In the image shown below, Macintosh HD is a APFS volume. With the Macintosh HD volume highlighted as shown below, click on the Unmount button.



The image below shows the Macintosh HD volume as unmounted.



The next step is to image the volume's AFPS container.  The container will not be shown by default in the UI; the Show All Devices option in the View menu must first be selected, as shown below.



After highlighting this volumes's APFS container, this container was selected to image from the menu bar, as shown below.



In the popup shown below, the file name for the image was changed to Macintosh HD. (The actual file name will be Macintosh HD.dmg.) The location for the image file was changed to the Documents folder. Also, the format was changed to compressed.



Click on the Save button to create the image.

Note: The commands given below could have been used in place of the Disk Utility application.

diskutil unmountdisk disk2
hdiutil create -srcdevice /dev/disk2 ~/Documents/Macintosh\ HD

The second alternative would be to image the root folder of the APFS volume. The volume must be mounted in order to image.

Select to Image from Folder... from the menu bar, as shown below.



In the popup, highlight the Macintosh HD volume, as shown below. Next, click on the Choose button.



In the popup shown below, the location for the image file was changed to the Documents folder. The format should be compressed.



Click on the Save button to create the image. In this case, you may be prompted for your password.

Note: The command given below could have been used in place of the Disk Utility application.

hdiutil create -srcfolder /Volumes/Macintosh\ HD ~/Documents/Macintosh\ HD