I just got off the phone with Symantec Enterprise Support and I thought I'd post the fix here for anyone else who finds this thread through Google. We had this same thing happening on unmanaged external laptops running SEP v14 MP1. Symantec support initially insisted that this laptop must have first been deployed as managed through our internal server, then switched to unmanaged, which I was 100% sure it was not. It was installed using the unmanaged package which was downloaded straight from Symantec FileConnect, it had nothing to do with our internal management server and they were able to verify that after connecting to the laptop via Webex and looking at a few things. So at that point it was as simple as running 2 commands from Start --> Run in Windows 7, the first stops the service and second starts it. After we did that the issue was resolved, LiveUpdate was no longer greyed out and it functions normally. The commands are:
smc -stop
smc -start
Wait about 10-15 seconds between the commands, then wait 10-15 seconds after running the second one and then launch SEP to confirm that LiveUpdate is fixed and working.