The problematic behavior can be reproduced in the following case:

• The DropDownList is at the lower part of the page, so the popup is rendered on top of the main element.
• The popup height is set to "auto".

In this scenario, when the user filters, the popup position remains unchanged but its height is reduced to fit the filter results. Thus, the popup looks detached from the main element. The behavior is not the same when the popup is rendered below the main element as in this case its top part sticks to the main element.

Reproduction: https://blazorrepl.telerik.com/mpEHGzOt25F1Znxi57.

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ADMIN EDIT

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As a workaround for the time being, you can ensure that the popup has a fixed height, so it does not collapse when there are less items to show. You may keep the default popup height or set your desired one through the settings tag. For example: https://blazorrepl.telerik.com/mpYdcfaN38JvIHgP41.