The problem is very simple here: Condor has scheduled DE1498 on Sept. 5 to be operated by one of their Boeing 757s - you can see this by clicking on "flight details" in your screenshot. That aircraft type does not offer business class at all (the premium cabin on these is marketed as "Premium Economy" instead) so Alaska cannot issue you a business award. See Boeing 757-300 | Our Fleet | Condor


DE1498_B757



If you want to fly in business class, you need to select another flight that's operated by one of their Airbus aircraft - these all feature a business cabin.