I don't have specific information in the available sources about recent UI changes to the instance access field in the user management interface, or configuration options to switch between a free text field and a pick list for instance values.
The sources discuss the User Management Element and its general capabilities for managing users and permissions
(1) (2) , but don't detail the specific behavior you're describing regarding instance value selection fields or recent changes to how these fields are rendered.
Since this appears to be related to a specific UI behavior change that's not covered in the documentation I have access to, I'd recommend reaching out over
Email to get clarification on:
1. Whether there was a recent UI update that changed the instance value field from free text to a pick list
2. Why instances might be showing as "not found"
3. Whether there's a configuration option or workaround to restore the free text input functionality, especially given your large number (600+) of unique instance values
The support team should be able to provide specific guidance on this UI behavior and any available options.