Make sure that your bam data is in the same active history that you are executing the tool from.
If yes, expand the bam dataset and check the assigned datatype. It should be just “bam”. If some bam variation, the data is either out of specification (missing a header?) or is not coordinate sorted.
I just tested this at Galaxy Main https://usegalaxy.org and the tool selection is picking up bam data (and others that fit the expected input types that I happened to have in this history):
