But try this:

1. Comment out the following code in ui_lists.php:

/*
            if ($txt == '') {
                if ($spec_option === false && $selected_id == array())
                    $limit = ' LIMIT 1';
                else
                    $opts['where'][] = $valfield . "=". db_escape(get_post($name, $spec_id));
            }
            else
*/

Then your drop down lists should still work with the boxes checked.

2. After typing in the search box, try the tab key, which allows ajax to update the page.   The matched search items would then appear in the drop down list.   I believe vanilla FA matches on item number, not description.

3.  For the customer/supplier lists, type a space key in the drop down list to display the search box.  Enter the search text and tab should allow ajax to update the page

There is an entry box for items (not customers or suppliers), but typing into it does nothing, as far as I can tell.

What can you edit or not edit?

So it is a feature, not a bug. But seems this feature is not very helpful, both 2 options should be combined.

Is this  bug or am I doing something wrong?