In versions previous to 18.104.22.168 of MaxCut if you wanted to make a library item you first had to make a grouped item and then only could you create a library item.
This meant if you selected a group of input items and right clicked on them the "Create Library Item" menu option was disabled.
From MaxCut 22.214.171.124 going forward you no longer need to first create a grouped item. You can simply add input items, select them and "create library item" will work.
To walk you through how this works, add a few library items to a new job. Then right click, you will see the "create library item" menu option available.
Select it, a library item dialog will show, put in a name for the new library item and then click save.
The library item will be added to the side library item bar, in addition the items you had selected will be grouped and renamed with the new library item name.