I'm assuming it is a Desktop (ArcMap or Pro) and not Online. Look at the Help-About if ArcMap and is will tell you the versions etc. If Pro, it's a little trickier.
Then it would be helpful to know the format/source of the data, If in ArcMap you can take a snapshot of the Table of Contents when on the second button, as that should give a clue if it is a file geodatabase, shapefile, or a different file format. All that helps to know how to edit.
It may be you are trying to put the items in a feature class that only contains points. So you may need to create a new one that accepts lines and digitize into that.