I am using ArcMap.
Why is Convert Labels to Annotation greyed out on right clicking a feature in the TOC?
I have no reference scales set.
I had to rename the ESRI folder under the user profile. When I opened a new ArcMap session, a new ESRI folder was created and fixed the problem. I believe the Normal.mxt was corrupt. One could simply delete the Normal.mxt and it would probably solve the issue.
C:\Users\myname\AppData\Roaming\ESRI_old
a common reason for this option to be greyed out is if labels are not turned on for the layer in question.
On right click, select Properties -> Labels, tick "Label features in this layer" and in the "Label Field", choose "Contour".
Another reason for the greyed out issue, is if the layer is set to a "Scale Range". If you set the layer to, "Show layer at all scales" it could fix the issue. Go to "Layer Properties" under the "Default" tab to set the "Scale Range".