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Putting aside the dubious claim of your host, please note that Admin Tools dos not disable the fix permissions tool because of the PHP version. Your PHP version is just fine. It disables this tool because you are on Windows hosting.

Please read the documentation page of the Fix Permissions feature. As it reads:

Obviously, this only has effect on Linux, Mac OS X, Solaris and other hosts based of UNIX-derivative Operating Systems, i.e. everything except servers running on Windows.

Please note that Windows has no notion of file permissions, it has ACLs (access control lists). PHP cannot modify Windows ACLs. It does not even provide an interface for developers to change them. Even if it did, it still wouldn't work because you need to have Administrator privileges (or Full Access privileges on the directory) to change ACLs on Windows.

If you are hosted on Windows you must use your host's access control tool to change the file and directory access control preferences – the Windows equivalent of permissions. If you're wondering, in previous versions of Admin Tools the tool was available to sites hosted on Windows but it still didn't do anything. Since several of our users were confused by the existence of a tool which apparently do nothing and, like you, they missed the all important sentence in our documentation we treated it like a bug and we fixed it: if it definitely doesn't work on your server we disable the feature to save you the frustration.