The dropdown is working as expected 
The “Reporting improvements” setting is a simple on/off toggle, so it only offers Everyone (on) and No one (off) — there’s no group-based targeting for this one.
We made this change on 2026-02-15T23:00:00Z to prevent confusion for upcoming changes that don’t support being scoped to specific groups. Since “Reporting improvements” applies globally to the admin reporting UI, offering a “Staff only” option didn’t make sense — it’s either enabled or it isn’t.
The screenshot in the OP was taken before that change. Selecting Everyone is the correct way to opt in.