My BI Publisher's security model is of Oracle Fusion Middleware ie it is using the same weblogic user as an Admin.
However Permission is always greyed out in BI Publisher. Is there something wrong at my side or is this the intended behaviour when the security is coupled with Fusion Middleware.
This is intended behaviour, nothing wrong in that. As in OBIEE11g the BIP is integrated with analytics presentation catalog you can manage the permissions from the analytics URL itself. If you create a new folder or report in BIP or in Presentation catalog it will get reflected in both and you can manage the permissions from analytics url for the presentation catalog folder.
Hope it helps.