When you try to "Prepare the TPM" manually in TPM.MSC console, you get the message "The TPM on this computer is currently locked out", and never get the option to Clear, Reset, etc as those remain greyed out.
Here is what you need to do...
Here is a solution. From an elevated PowerShell prompt run these three commands:
$tpm=get-wmiobject -class Win32_Tpm -namespace root\cimv2\security\microsofttpm
Reboot your system and accept the prompt to clear the TPM data. You will now be able to encrypt the drive using the TPM chip.