Hi @sienna28 ,
Could you please share a bit more about your scenario?
How do you submit data back to your CDS Entity? Using PowerApps form?
Based on the needs that you mentioned, I have made a test on my side, and don't have the issue that you mentioned. If you use PowerApps form to submit your data back to your CDS Entity, please consider re-generate a new app based on your CDS Entity, then check if the issue is solved.
In addition, please also consider go to your PowerApps Web Portal (https://make.powerapps.com), then go to "Data" -> "Entities", find your CDS Entity, then click "Data" tab, check if the LookUp field is populated with proper values:
Please take a try with above solution, check if the issue is solved.
Best regards,