Yes @riclund2 : unmanaged solution have more options but this post is explicitly for the managed solutions because that is the way to go for my desired Application Lifecycle Management purpose through different environments and different tenants. That is the whole purpose of Environment Variables with a separated Default Value from an optional overwritable Current Value.
Here is an update after a lot of troubleshooting with Microsoft Support.
Basically when exporting a managed solution from an unmanaged solution with environment variables there are three scenario's:
- the unmanaged solution never had a current value and then you exported to a managed solution.
- the unmanaged solution has a current value and you removed the current value before you exported to a managed solution. This seems to be the best practice according to Microsoft: Use environment variables in solutions - Power Apps | Microsoft Docs

Microsoft seems to have changed this documentation since I raised a support ticket --> it used to say we should remove the Current Value so a red banner would prompt stating an Environment Variable needs to have a value. 🤔 - the unmanaged solution has a current value and you left that current value intact before exporting to a managed solution
We have run through every option to try to change the Current Value in every scenario in totally new target environments without errors:
- edit through modern interface of managed solution
- edit through Advanced Find of Power Platform Environment
- edit through modern interface of default solution
- edit through Dataverse / Common Data Service backend Tables / Entities
- edit through unzipping managed solution, editing solution files and rezipping to managed solution
I do not want this to make a whole new documentation page so here is my conclusion:
Microsoft Product Team is fixing a bug because option 1 should also work in every scenario.
However for now:
If you want it to work in the modern interface without a lot of hassle: use scenario C above because then you can use option 4 to edit the Current Value.
If you are like me and followed Microsofts advise, using scenario B & you added a totally new Current Value for the first time right after import into target environment. There may be moment where you want to update the Current Value for a second, third etc time. The only working workaround I found is to change the unmanaged solution to scenario C by adding the Current Value back in a new exported version of the managed solution. Unzip this new managed solution, edit the environment_variable_values.json to match the desired values AND the correct Environment Variable Value record GUID of the target environment and then import the new managed solution into the target environment. Now it will accept the import and change the current value.