I'm seeing the same, It's grey out the option and doesn't allow the user to change the setting and it doesn't actually set Fast User Switching to be enabled. I was able to add a device as an exception to the configuration policy, and then set Fast User Switching and then remove the exception. Not a solution but a workaround if you need this on.
It's currently a product issue is what we got told by support. I guess more pressure needs applying to actually get a fix.
"PI-009059 - Computers with macOS 11 or later fail to respect the Enable Fast User Switching setting in the Login Window payload of a computer configuration profile."