Because the red box is not an image. “Image” generally refers to any raster art, like a TIF, JPEG, PSD, or something rasterized with Object > Rasterize or Effect > Rasterize.
If you want everything on the layer to have 25% opacity (100% opacity is fully opaque, as it likely is now) then click on the dot to the right of the layer name (the little donut next to Reflections in my screen shot), then open the Transparency panel and set the opacity to 25%.
1 person found this helpful
You wanted to dim it just for the exercise to see how the feature works either import an image by placing it into the document File>Place.
Or you select the red rectangle and go to Object>Rasterize which will turn the red rectangle into a raster image even though it is all just one color
and now you will see how the feature works.
For future reference there is a feature in Illustrator that dims all artwork that you are not working on in certain instance. This called Isolation mode
if you have several objects on the canvas and double click one of the with the selection tool (black Arrow) it will not only select that object but dim all the others protecting them from being edited while in isolation mode, in case you are overlapping another object. It also works with groups and grouped groups.
Thanks Scott and Wade for your response.
Your answers were incredibly useful and very interesting. There is an awful lot to learn in AI.