The menu item is greyed out, in a disabled state:

Log:
default 16:44:17.778106+0800 SwiftFormat Requesting container lookup; class = 4, identifier = <private>, temp = 0, create = 0, euid = 501, uid = 501, personaid = -1, type = NOPERSONA, name = <unknown>
default 16:44:17.778831+0800 SwiftFormat container_create_or_lookup_for_platform: success
default 16:44:17.781037+0800 SwiftFormat Hello, I'm launching as euid = 501, uid = 501, (persona not available)
default 16:44:17.787350+0800 SwiftFormat Initializing connection
default 16:44:17.787420+0800 SwiftFormat Removing all cached process handles
default 16:44:17.787460+0800 SwiftFormat Sending handshake request attempt #1 to server
default 16:44:17.787484+0800 SwiftFormat Creating connection to com.apple.runningboard
default 16:44:17.788121+0800 SwiftFormat Handshake succeeded
default 16:44:17.788156+0800 SwiftFormat Identity resolved as xpcservice<com.charcoaldesign.SwiftFormat-for-Xcode.SourceEditorExtension([app<application.com.apple.dt.Xcode.29526820.29553638(501)>:19276])(501)>
error 16:44:17.788882+0800 SwiftFormat Bootstrapping; external subsystem UIKit_PKSubsystem refused setup
default 16:44:17.788923+0800 SwiftFormat Bootstrapping; Bootstrap complete. Ready for handshake from host.
default 16:44:17.790302+0800 SwiftFormat [u D30A2660-BB60-4B7C-9FDD-D8EE23ABA8FD] [(null)((null))] Prepare received as euid = 501, uid = 501, (persona not available)
default 16:44:17.791074+0800 SwiftFormat [u 286C7234-9581-404B-9740-EF93D494333D] [<private>(<private>)] Set sole personality.
default 16:44:17.792705+0800 SwiftFormat [u 286C7234-9581-404B-9740-EF93D494333D] [<private>(<private>)] Begin using received as euid = 501, uid = 501, (persona not available)
default 16:44:17.799238+0800 SwiftFormat Loading XcodeKit failed: Error Domain=XCExtensionRendezvousErrorDomain Code=4 "(null)"
default 16:44:22.875324+0800 SwiftFormat [u 286C7234-9581-404B-9740-EF93D494333D] [<private>(<private>)] Removed sole personality.
default 16:44:22.875474+0800 SwiftFormat [u 286C7234-9581-404B-9740-EF93D494333D] [<private>(<private>)] host connection from pid 19276 invalidated
@imWildCat can you try building the extension locally from source? I suspect some kind of permissions issue, but I don't have Big Sur yet to test on.
@nicklockwood Yeah. I found that, if I built it locally using Xcode 12.2, it can work:

@imWildCat I've rebuilt the extension with Xcode 12.2 - can you check if it now works for you?
@nickffox Do you mean 0.46.3? Does not work

@imWildCat no, I mean version 0.46.4 (released yesterday)
@nicklockwood I cannot find 0.46.4?

@imWildCat I meant 0.47.4 (you said 0.46.3 so I got confused).

Yeah I can confirm this fix!
Thanks for your help! And sorry for the delay.