This option is available if the project is "Unified", that is to say, if it has been stored in Dashboard. At least one snapshot must have been uploaded to Dashboard from the project.
Generating the baseline involves selecting a suitable snapshot, and downloading the diagnostics from the snapshot. This process is controlled via the Dashboard : Download Baseline menu option.
A full description of baselining from Dashboard is given in Downloading a Baseline.
When uploading to Dashboard, ensure that the source code is included in the upload. If not, then Helix QAC will not be able to suppress diagnostics with a baseline downloaded from Dashboard.