The weapon isn't "greyed out" because it can't be used, but it has a darker color because it attacks with the darkness element. It's the same as fire element weapons have a red name, and water weapons blue.
Check the rest of Ryen's equipment. There are equipment pieces that make the character attack automatically, as some sort of optional auto-battle system for individual characters.
The Katryx Blade itself doesn't do any damage to Lace when you attack normally. Instead, you have to use the armor crushing skill Ryen gets while the blade is equipped.