Tools - Options - email options (bottom of form)

box: "Automatically put people I reply to in" is checked

I clicked the Browse Button, than highlighted the
Contacts folder.  (I also tried clicking it.)

Problem: the box in front of the Browse Button remains
grayed out.

I clicked OK until I got out, then replied to a message
from a sender who is not in my mailbox. I want Outlook to
put that sender's address in my Contacts and Address
Book. It didn't happen.

What am I missing here?  Why does the problem gray box
remain grayed out even when I select the Contacts folder?