When I right click on the unmanaged device, the option to copy to Inventory database is greyed out
As far as I am aware the option move to inventory database from UDD scan is only for virtual host device.
See this article for details:
It is only for (specific) Virtual Hosts, as J-P says. To make a normal device managed, drag-and-drop it onto an Agent Configuration and start the scheduled task that creates.
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