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Usually seen in self-service chat windows, the user selects the problem area, and it responds with more detailed categories to pin-point the problem, taking the user through a workflow of diagnostics without user needing to type anything. What is this called and are there ready-made tools to design these workflows?

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And the user usually just have to click on the relevant menu items. I want to design some simple questions to answer colleague's computer problems.

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These things are usualy called Wizards, or multi-step flows. Nielsen has some recommendations on how to use them.

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While a Wizard answers the question correctly. I also think that Conversational User Interfaces with suggested inputs fits the scenario described in the question.

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The benefit of this over a wizard would be that, you do not have to worry about the total number of steps (like step 3 of 5). It can be dynamic.

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It's called a chatbot (which is a conversational user interface method applied to a wizard, as others have pointed out).

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