Hi Dean!
Happy to see Judy has been helping you!
I noticed that you've also opened a support case and connected with my colleague, Jan Lua. So glad to see the insight he shared helped solve your issue! For anyone else discovering this thread with similar questions:
"Are you adding the question bank to a quiz or to a knowledge check inside a lesson? If you are adding it to a quiz, the option will appear. On the other hand, if you are adding it to a knowledge check, the option will not appear.
You cannot add an entire question bank to a knowledge check block, as it will only be one question. You can, however, add multiple knowledge check 'draw from question bank' blocks".