@Syvenn thanks for the info!
Unfortunately I am unable to recreate that particular issue. I also added extensive filtering to my test scenario and was able to update that LookUp field.
When you use the filter without the .ItemValue at the end, normally the LookUp should populate.
Filter(Choices([@Projects].new_ItemValue2), EntCode = "PRO1" && Module="Project" && Prompt="Status")
Originally that will have caused the issue, because the selected value was the .ItemValue field and you need to patch a record.
Instead of typing the display name you can also change it by clicking on the DropDown, going to the property panel on the right and clicking edit display field:

If your value without the filter works and is Choices([@Projects].new_ItemValue2), I don't really see why the filtering would change the patch functionality.