if it's greyed out - could be that you are not on the paper layer? (the one you are trying to cut.) - or you need to simplify it (rasterize if in PS) see the TIP at the end of the second post Cheryl for how to do this.
I had to do a work around as my Layer/New/Layer Via Cut was grey (not usable). I have PSE 2018 and it is sometimes quirky so not surprised.
you got it! a striped paper, some cuts out of the striped paper, rotated and placed back on the page a little differently than how the pattern started. the pattern paper and its cut out pieces make up 95% of the page foundation - a little 5% peek of another paper is underneath - perfect!
In your layout go to file open and grab your elements and papers from whatever kit you are using and then drag the papers and elements from the bin into your workspace.
Your paper or element needs to be rasteruzed if it is a smart object in ps cc or simplified in pse before you can new layer via cut
Also I do not know what program you normally work with but I thought you have always worked with PSE.. bringing in files and placing them in your workspace like normal re photo bin and dragging would be how I think you are doing it. This is no different.. if you use something other than pse than however you cut shapes out and bring in papers would be how you would do this as well.
Ok I have PSE 2020 but haven't played with many tools. When I tried to cut the shape using the cookie cutter tool it cut the shape out and took the back ground away. I ended up using the Eliptical Marquee tool but can only do circles and squares. What am I missing????
Day 19 – Cutout Shapes Red, White, Blue – Bella Gypsy My America papers – Kirsten Jensen Gallery: https://the-lilypad.com/forum/galleries/day-19-cutoutshape.419359/
I'm sorry I don't know much about what the cookie cutter tool does but there are directions (plus a screen shot) for how to use a unique shape/element in post #2 that you can try if you want to play around. otherwise your page looks great with the circles as is!
WooHoo! This was fun! And gave me a chance to scrap about something that I don't have pictures of (other than screenshots of news announcements). Hoping I met the percentage requirements...
Can't help but Think Spring.....it's 12 degrees here in Pittsburgh.... Very different challenge...but a cool effect.