This did the trick for me:
"In Big Sur and later, you can actively add the Keyboard Maestro Engine to the Screen Recording permission in the System Preferences, Security & Privacy, Privacy, Screen Recording settings by unlocking the System Preferences, and then finding Keyboard Maestro.app in the Finder, control or right click on it, select Show Package Contents, drill down in to Contents, and then MacOS to find the Keyboard Maestro Engine.app, and then drag that in to the Screen Recording settings."
https://wiki.keyboardmaestro.com/assistance/Screen_Recording_Permission
I'm was having the same problem as Geoffrey in Big Sur 11.6 20G165 and the latest version of KM: 10.0.
The alert states: "Screen Recording permission is needed to capture images of the screen, or find images on the screen. Please enable Screen Recording for Keyboard Maestro and Keyboard Maestro Engine in the Screen Recording section of the Privacy section of the Security & Privacy system preference pane." The problem was how to find the Keyboard Maestro Engine to add to the Screen Recording section.