Hi,
The virtual network adapter of a virtual machine needs to connect to a virtual switch, not a host network adapter. You can only see the Not Connected option if there are no virtual switches configured. Open Virtual Switch Manager from the right pane, create a new external virtual switch and connect it to the Network Adapter on the host server. Once the virtual switch is created you will see it in that Connection drop-down menu when you create a new virtual machine.
Best Regards,
Ian Xue
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