In order to enable keyboard navigation of dialogs when using Fade In on Mac — particularly helpful with things like the Reformat dialog — you'll need to make sure that the system setting System Preferences > Keyboard > Keyboard shortcuts > Full Keyboard Access is "All controls".  Setting it to "Text boxes and lists only" will prevent full keyboard navigation of dialogs from working.

(Note that as of Catalina (macOS 10.15), the option has been changed to System Preferences > Keyboard > Shortcuts > Use keyboard navigation to move focus between controls.)

Tags: keyboard, mac