Proxy workflow (interpret footage)

I am trying to use proxies when editing a 60fps clip. I import clip to pp, interperate the footage to 23.976, right click then create proxy.

Media encoder opens up, I stop the encoding, reset the status, delete the beginning of the proxy it had started creating, but the interperate footage option is greyed out.

I have tried opening media encoder stand alone, and opening several different clips to see if it would let me interperate those, but still greyed out.

I can take the generated proxy (60fps), into pp and pp will interperate it to 23.976 then hand it back over to media encoder which will render it out at 23.976, so don't understand why media encoder won't interpret it.

Thank you in advance for any suggestions