The scale up to V3 option being greyed out is expected behavior if the underlying scale unit in which your web app is hosted does not contain any V3 instances.
More information on scale units can be found here.
In order to host your application on Premium V3, your application will need to be moved to a new scale unit. To do this, you will need to create a new resource group placing a V3 App Service Plan within it and then redeploy your web app to this new plan.
An alternative option could also be to Clone your web app to the new V3 App Service Plan as opposed to redeploying.
This document walks through the prerequisites for being able to change to a V3 tier- Configure PremiumV3 tier - Azure App Service | Microsoft Learn