Generally this option will grey out if you have already initiated this and Tools image is mounted to guest VM. Go to VM settings and check if tools image is mounted. You might have initiated it previously.
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when you see this option grayed out that's means sometimes that you don't have a virtual Optique drive in your Vmware guest , so try to make one from menu VM->settings->ADD .
After adding a CD/DVD drive, "Install VMware Tools" is not grayed out anymore.
I had a similar problem when installing a 64-bit Debian 9.x VM from a VirtualBox .ova file on VMware Workstation 14 Pro.
The problem was that the guest OS was set to "other" in Settings->Options->General
If I set the OS to Debian 9.x, VMware complained about the BusLogic SCSI driver being incompatible and would not launch the VM.
Finally following another post, I set the OS type to ubuntu (even though it's Debian). Then it all worked; I was able to mount the vmware tools ISO and the "Install VMware Tools" menu option was available. Then in the VM it just appeared as if a CD had been put in the drive.
You can try to address following path of ISO files on the ESXi host :
And then install the VMware Tools on guest OS again.Please mark my comment as the Correct Answer if this solution resolved your problem
This worked for me too after a Fusion upgrade to 11:5 using a Windows 10 machine.