Thank you for posting a detailed question here.
I understand you are unable to link the desired VNET to the Azure Private DNS resolver as it is greyed up in the selection window.
If already not gone through just adding the link for Virtual network restrictions for Azure DNS Private Resolver, just in case if you are hitting any restriction here.
If above is not true you can try steps mentioned below and see if that helps in resolving the issue
- Try using the preview portal link and see if this fixes the issue
- Try using a different browser and see if that helps in getting rid of the issue.
- In order to help isolate the issue, you can try linking the VNET using Azure PowerShell and if there is no error observed then the issue is likely with Azure Portal. If you observe any error please let us know as it will help us further troubleshoot this issue.
- If PowerShell method above was successful, then the issue is likely with Azure Portal. As I was unable to reproduce issue on my end, I think a support request will be required in this case where a support engineer will request browser trace to help further troubleshoot this issue.
Hope this helps. Please let me know if you have any additional questions. Thank you.