'Turn Off Passcode' is greyed out on my iPad

Your iPad will require a Passcode if TouchID has been enabled and fingerprints registered. Be aware that removing the device Passcode will disable much of your iPad’s advanced functionality - such as TouchID/FaceID and Keychain stored passwords.

If you really wish to remove the device Passcode, you must first delete each and all of your registered fingerprints from the iPad. Once removed, assuming that your iPad is not centrally managed, the option to Turn Passcode Off will be available in iPad settings.

There are several possibilities:

• The iPad is managed by parental controls
• If you have a work or school email address on your iPad, or it has MDM enabled) the owner of that email address can manage many security settings, including turning off the passcode
• Go to Settings/Screen Time/Content & Privacy Restrictions and see if Passcode & [TouchID or FaceID] is set to Don’t Allow

Well, first go to Screen Time and changing it to don’t allow, then change it back.

I have a suspicion you did not receive a new device.

Have you tried resetting the iPad to factory settings and starting over?

The option to automatically transfer data and settings from an existing iPad or iPhone to a new device will only be available when the new device has been fully reset to the initial "hello" screen.

If a compatible device is placed in close proximity during initial setup, the devices will automatically link and offer the opportunity to transfer settings and data. If you have already completed to initial setup - as your post might suggest - this automatic process will not be available unless you completely reset the new device and start again:

Settings > General > Transfer or Reset iPad > Erase All Content and Settings

Did you purchase it new directly from Apple?

You're very welcome. 🙂