Outlook no longer grouping emails by conversation

Show as conversations is only available when you group by date. If it's grayed out, you need to switch to the Date grouping. When Show as conversations is enabled, the Date group is labeled Date (Conversations).

Based on my test on my Outlook, it works well, so what detailed version of Outlook are you using?(File > Office Account > About Outlook)

Please make sure you have upgraded it to the latest(File > Office Account > Update Options > Update Now)

Besides, when you upgrade from an old version of Outlook, Upgrade to Conversations is set automatically during the first run process after upgrading, check the UpgradeToConversations value under the Outlook key at
HKEY_CURRENT_USER\Software\Microsoft\Office\16.0\Outlook\Setup
DWORD: UpgradeToConversations
Data Value: 1