Why is it that I am unable to format my pendrive in exfat using gparted?

I was also getting the same error in gnome-disks. You can switch if you want.

exFat was still greyed. However, I fixed by installing:
sudo apt install exfat-utils exfat-fuse

While Gparted cannot handle exFAT format, beside other tools that can (Gnome Disks, KDE Partition Manager), there is also the USB Stick Formatter, part of the mintstick tool (which includes both an USB Formatter and an USB Writter), and it covers exFAT format.

It is default in Linux Mint but can be installed in Ubuntu as deb from packages.linuxmint.com or pkgs.org.

Workaround: use gnome-disks

This is the default pre-installed disk manager tool on Ubuntu that shows on the Dash as "Disks".

You can also launch if from the terminal with:

gnome-disks

Ensure that you have the exfat backend installed:

sudo apt install exfat-utils

Then as of Ubuntu 18.04:

• Gears button
• Format Partition
• Type: "Other"
• Next
• exfat

The GUI was a bit different in older versions: GUI tool for formating to exFAT

This is the only non-archaic filesystem I could find that works natively on all of current Mac OS, Windows and Linux, what a world to live in.

Gparted doesn't[UPD 210609] support creation of exfat file systems. You can use mkfs.exfat utility from the terminal like:

sudo mkfs.exfat -n LABEL /dev/sdXn

Replace LABEL with the label that you want for your USB and /dev/sdXn with the partition id of your USB.

You will have to install exfat-utils and exfat-fuse from the universe repository for the above to work;

 sudo apt-get install exfat-utils exfat-fuse 

UPD 210609 is not true anymore, just install exfatprogs