Thank you for reporting a bug to Unity.
After reviewing the behavior, we've confirmed it aligns with the current design and intended use of the feature. We understand this may differ from your expectations or workflow.
We will close this case as 'As Designed.' If you have feedback on how the feature could better meet your needs, please let us know - we value your input and consider it in future improvements.
The dialog description describes the step requirements, whereas the dropdown placeholder indicated you can type to search.