The rotary tool set collar will not grab the bits. I have never used the drill master previously. what am I doing wrong?

SOURCE: hammer drills and rotary hammers comparison

Basically yes. Lower power units are usually titled as "hammer drills." Higher power units, usually labeled "rotary hammers," tend to be larger and provide bigger impact forces. But there are a few differences that are worth knowing: The rotary hammer usually have a chisel only feature, for light chiseling and masonry removal. Rotary hammers also have specially designed chucks that only accept bits specifically designed to fit their chuck. The special chuck on a rotary hammer helps hold the drill bit and prevents it from slipping during use.

SOURCE: Ryobi impact drill compatibility with normal drill bits

Round bits are not compatible with the Ryobi impact drivers. You need the hex shank "quick connect" bits and accessories. There is an adapter available. it is basically a regular style of keyless drill chuck with the quick connect hex shank that should fit right in to your Impact.

SOURCE: Bit stuck in Bosch PS20 keyless chuck

These units have only been out for a short while and most are on warranty. Take it to a Bosch Service center in your area and they will replace the front of the unit. Unfortunatly this is a problem with this type of unit. The bit will deform slightly from the impacting action and lock itself in the chuck.

SOURCE: I borrowed a black and decker rotary tool (RT

slide the orange on/off switch all the way back then push in the black button the switch slides over. This will lock the shaft-then use small wrench provided w/ tool to turn the collet nut

SOURCE: I have a makita hr2455x rotary hammer drill that won't hammer

you need to get that service,
the grease causes the hammering.
and probably too much pressure was applied
to it.