See the Units and Symbol Size page for more information. The problem is that you actually have to set your symbol sizes in metres, feet etc, and not points. This does mean that the point symbology will be at a fixed size and not change when you zoom in and out.
To change:
- Right click on your 3d layer and choose Properties
- Choose Display from the left hand menu
- Tick the box that says Display 3D symbols in real-world units
If you check the symbology now, the symbols size should be in metres, feet etc. and the Layer 3D to Featureclass tool should now work. See attached screenshot.