Appreciate the thought, but I do not use the Content & Privacy restrictions functions. This phone (a 17 Pro Max) inherited the settings I had on my iPhone 16 Pro Max which did not have the problem as far as I can remember when I migrated it to iOS 26. The 17 Pro Max did an automatic upgrade, when I set it up, to 26.0.1, so I never had the chance to check if the problem occurred on iOS 26.Do you use the Content & Privacy restrictions within the screen time settings? I use this on my iPhone to lock down my Apple account settings as a secondary level of protection should my iPhone be accessed by another person they will have this additional barrier before they can lock me out of my own Apple account. It does prevent changes on some settings that are not always obvious. It might be worth disabling this setting and make your change and then re-enable the setting again to restore the additional protection.
Not sure if this will have any impact on the issue but I have found a few settings that I cannot change until I remove the restriction in screen time. Worth a check?
My wife's iPhone 16 Pro Max which is on iOS 26.0.1 does not have the issue and is set to "Automatically Allow When Unlocked" and can be changed as needed. As noted in my original post, I cannot do this on my 17 Pro Max with iOS 26.0.1 so I think that the problem is hardware related.
Also a quick survey with friends indicates that the 3 that have the problem have 17 Pro Max and 2 that do not have the issue have Airs. This excludes friends with 16 Pro Max'.