You have just added a new VPP application and trying to set “Force license association to device” to ON. However the Option is grayed out.
XenMobile needs to complete the VPP license sync, you need to wait for this to complete before the setting can be adjusted.
If you have just added a new VPP account which has a lot of applications added to it the license sync may take a long time to complete.
Note: The application also may not be enabled by the developer for VPP device based license assignment.