To reproduce:

Add a RadMenu and a RadMenuItem. To the RadMenuItem add another items, make some of them disabled. Open the first menu item and navigate with the arrows, you will see that the disabled items are selected but no visually.

They should be skipped during navigation

Workaround:

Use the following custom RadMenuItem. The navigation logic is overriden in the RadDropDownMenu:

public class MyMenuItem : RadMenuItem
{
    public MyMenuItem()
        : base()
    {

    }

    public MyMenuItem(string text)
        : base(text)
    {
    }

    protected override RadDropDownMenu CreateDropDownMenu()
    {
        return new MyDropDown(this);
    }

    protected override Type ThemeEffectiveType
    {
        get
        {
            return typeof(RadMenuItem);
        }
    }
}

public class MyDropDown : RadDropDownMenu
{
    public MyDropDown(RadElement owner)
        :base(owner)
    {
    }

    protected override bool ProcessUpDownNavigationKey(bool isUp)
{
    var selectedItem = this.GetSelectedItem();

    RadItem nextItem = selectedItem;

    var itemIndex = this.Items.IndexOf(selectedItem);
    for (int i = itemIndex; i < this.Items.Count - itemIndex; i++)
    {
        nextItem = this.GetNextItem(nextItem, !isUp);
        if (nextItem.Enabled)
        {
            break;
        }
    }

    this.SelectItem(nextItem);

    return true;
}


    public override string ThemeClassName
    {
        get
        {
            return typeof(RadDropDownMenu).FullName;
        }
        set
        {
        }
    }
}