This is because you have no material [protrusion] to perform the "cutout" to.
Design Manager Streetscape Ltd
Solid Edge 2019 [MP8] Classic [x3 Seats - Cloud Enabled]
Windows 10 - Quadro P2000
Maybe you have Solid Edge Design&Drafting license and it doesn't contain Lott functionality (and many others)...
ALL OF CUTOUT COMMANDS WILL BE INACTIVE TILL U HAVE A SOLID FROM WHICH U HAVE TO REMOVE SOME MATERIAL BY PURPORTING CUT OPERATION,.
BY PERFORMING CUT OPERATION, U R TRYING TO REMOVE MATERIAL. FACT -THERE IS NO MATERIAL IN THE PRESENT PART.
ASSUME WHAT U R DOING IS ACTUALLY TRYING TO REMOVE MATERIAL FROM A ZERO MM DIA ROD, AND U WANT 10 KG MATERIAL SHOULD BE REMOVED.