Cloud Witness option is disabled in Failover Cluster

I had my SQL Server Cluster AG up and running and using the local File Witness Sharing, but later on I decided to move witness to the Azure cloud as I need to expand my cluster to a DR Site.
When I try to change the cluster quorum setting to I got this

There is no indication why, nothing in the windows event log, or cluster log.
I tried to use Powershell to change the setting using the command in the following URL

Set-ClusterQuorum -CloudWitness -AccountName -AccessKey
But I got the following error message

Set-ClusterQuorum : The current cluster functional level does not support cloud witness. Please update your cluster
nodes to Windows Server 2016.
At line:1 char:1
+ Set-ClusterQuorum -CloudWitness -AccountName -AccessKey 

In Windows 2016, its possible to have multiple OS in the same cluster like Windows 2012 and 2016, this will force the cluster to operate in a lower function level for the compatibility reasons.
To address this issue we need to raise the Cluster Function Level using the following command 
Update-ClusterFunctionalLevel and press enter
after running this command and confirm the changes to the function level, I was able to configure the cloud witness via the GUI :)