That doesn't look right. When you select a question outside of the L&M block, you should be able to select the answers (all, displayed or selected etc). If you are selecting a question type that works with L&M (MC-multiple answer, text entry, matrix, side-by-side etc) you should see the dropdown box next to the selected question. You might want to contact support.

I am having the same exact issue. Contacting support.

I am having the exactly same problem as AKorsunska and @Immcc
Would it not be wise to post the solution here, in case this has already been brought up as support issue?
One addition from me here: In older blocks of the survey, where Loop & Merge is still working, it is also not possible to change the loop source to another question...
Please share once you get support, this would save time for potentially many of us.

Maslowest lmmcc This is probably not helpful but the only way I was able to get past this issue is by either by just trying over and over again like 30+ times until one time I didn't get the error and it worked. Another time I tried using a different internet browser, and it seemed to work for a while (but not always).

https://community.qualtrics.com/XMcommunity/discussion/comment/40681#Comment_40681Thanks for sharing AKorsunska, reporting back from my chat with Qualtrics support, I can say that they do not have a better solution for the moment either.
Best solution was and it worked instantly: Opening a "private" tab in Firefox or Chrome and logging in from scratch.
Who knows why, but this seems to work for the moment. Let's hope that the developers / engineers manage to resolve the deeper lying problems soon to provide for a more durable solution.

TSAcc, I wonder why we have an "accepted answer" to this issue, when, clearly, the underlying issue is not resolved and no satisfying solution could be provided from QT support.

Maslowest Your guess is as good as mine. I am not one of those who goes around accepting my own answers, be rest assured.

Came here to say I'm having the exact same problem! I've restarted my browser multiple times and sometimes the answer drop down appears, sometimes it doesn't.

I had the same problem. The solution was turning off my adblock software.
Browser: Chrome 94
OS: Windows 10
Ablock: Ublock Origin

I was able to get this working in Chrome but not Safari. Looks like there is some type of Javascript that prevents it from displaying in my Safari.