If you're seeing a white light on the keyboard near the sensor on the top right, that should mean that it's on and functioning. The fact that our software detects that it's off and remains off shows that there's some kind of issue. Most of the time, restarting the leap service will resolve this problem unless there's some issue with the sensors.
The diagnostics button being grayed out means that the software thinks the sensors are disconnected or faulty.
I'm familiar with Warehouse Deals and know that the items they sell are either returns or items that were traded in to Amazon. It's possible that the reason for the return/trade-in was due to the faulty sensor. From personal experience and from stories online, the quality check for Warehouse items isn't always the best.
If there are other keyboards available from warehouse deals, I would recommend contacting Amazon support to see if they will allow you to exchange it or return it for a refund.