https://wccftech.com/apple-explains-why-app-tracking-toggle-in-ios-14-5-is-grayed-out/

Earlier this week, Apple saw fit to release iOS 14.5 to the general public. While all the features and improvements are a welcome addition, there are numerous under-the-hood features oriented towards user privacy and security. One of the significant features brought forward by iOS 14.5 is App Tracking Transparency. It allows users to control whether developers can gather app data for ad targeting. Apple has added an App Tracking toggle in Settings but it is grayed out for some users. While we were not familiar with the reason, Apple has explained why the feature is not available to some users.

We previously covered how you can prevent apps from tracking your iPhone in iOS 14.5. The feature went live alongside the release of the latest iOS build but some users were not able to interact with it. The App Tracking toggle was grayed out for some users. Users would simply have to go into Settings > Privacy > Tracking and toggle off the "Allow Apps to Request to Track" button.