I have successfully encrypted a system with MDE 7.1 OFFLINE. I wanted to test the "Administrator Recovery" function. On the client I type in the user id and click Recovery. The only option for recovery is Question and Answer Recovery (Administrator Recovery is grayed out). In EPO, I checked my "Offline" policy by going to the Recovery tab and "Administrator recovery" is Enabled. Is "Administrator Recovery" not available for Offline Activation?
Not until it's connected to EPO, no. EPO does not know the machine keys yet.