I can confirm that the suggestion by @AngryParsec works.
If your graphics drivers have DirectX 12_2 support showing Shader Model 6.6 or higher (I had to upgrade from Windows 10 to 11 to get past Shader Model 6.5, FWIW), and your Project Settings have the Platforms - Windows > D3D12 Targeted Shader Formats > SM6 checkbox already, then the problem may be the second option in their screenshot.
Targeted RHIs > Default RHI: must be set to DirectX 12. Leaving it “Default” makes the Shader Model 6 preview gray out.