@GeckoFriend - you can see that no-one else is reporting any issues with it, so it seems likely to be related all your tinkering. Menu items will be greyed out if the plugin cannot find them, such as referring to a menu item of a plugin that is no longer installed. The only ones that I know would have been greyed out after this update are if you put specific Reading List menu items on there, because they will no longer have the counts on them. Certainly I did not have to recreate my menu after upgrading for any other menu items, nor would I expect anyone else to have to. Post the current contents of your "Favourites Menu.json" file in a spoiler, I would be interested to see what the plugin is seeing right now.
Just remove the greyed out menu items on the RHS and re-add them. If you've completely knackered things just delete the "Favourites Menu.json" file and restart calibre.