"Discrete TPM" means you have a daughter board that you plug in to a physical TPM port on the motherboard (check your motherboard manual for where it is, and which kind is compatible). If that device is physically not actually there, then that BIOS option does nothing for you.
You should check and see if the "Firmware TPM"/"fTPM" option is available, because that one will work without the physical add-in card.
