I facing the same issue, i’m working in 2 projects and the contextual menu option fails on both (same engine version), but for the first one i able to generate the xcode project running the GenerateProjectFiles.sh command, sadly it does not work in my second project. I tried to fix this issue since few months without any luck.
In case it help you, open terminal and run:
sh "/{PATH_TO_ENGINE}/unrealEngine-4.21.2-release/engine/build/batchfiles/Mac/GenerateProjectFiles.sh" -project="/{PATH_TO_PROJECT}/{UPROJECT_FILENAME}.uproject" -game