What problem does this address?

I'm frustrated when I use the three-dot menu to add settings options to the block settings sidebar, but that's not a persistent preference. This is made worse by the popup menu occluding the options that I want to set. To make the menu go away, I'm used to clicking away from the menu itself, but unless I click on the sidebar or exactly on the element that I'm modifying, the sidebar changes to the element that I clicked on and the menu reverts back to default behavior when I get back to the element I'm trying to modify.

The first time this happened, I went around this loop 4 times before I figured out what click targets were acceptable to not have it lose my preference change.

A quick screen video, in case this isn't clear:

What is your proposed solution?

Some options:

1. Remember the options that I want to customize for a given block, or block type, so that when I return to that block, the settings are available and I don't have to go around the menu loop again.
2. Have the first click outside the menu simply dismiss the menu and not change the focus to elsewhere (i.e., do the same things as the Escape key does.).
3. Find a way for the popover menu to not occlude the input that gets enabled. That way, when I enable a setting control, the natural thing to do would be to click onto that control.
4. Ditch the popover menu altogether and instead have each control set have two modes: pinned and full. Pinned mode would start with the default controls (as it does today). Full mode would have all the controls and would allow you to directly edit or pin controls for display in pinned mode. That is, combine the idea of pinning (which is what the popover menu is today) with data entry.