Mine is also grayed out (refer to the picture)
What I'm saying isn't something that I'm 100% sure about, but should be pretty accurate; you can go online and do more research on it:
The service states: "
Adds, modifies, and removes applications provided as a Windows Installer (*.msi, *.msp) package."
There are many applications, that you could install, that may have an msi extension. So if you disable this service, the msi installer files will not install. In the past I've seen some Windows Update files that have msi as their extension (instead of exe). So I'm assuming that this is a very essential service that Microsoft doesn't want you to disable, because if you manage to disable it, some apps that you try to install will probably not install, and the same with some Windows Updates (they may not install). Hence it is highly recommended to keep this service running.
Windows Update service: Very recommended that Microsoft doesn't want you to disable. Because if hackers hack Windows, Microsoft would release updates to avoid hackers from getting in your computer. So Windows Update is VERY recommended to be enabled all the time.
*Edit*: My Windows Update service seems like it could be disabled, that's strange. I thought it was always enabled. I don't know why yours is different. But it's nothing to worry about. Your computer is safe because it's enabled.