Please refer to the attached gif file demonstrating how to reproduce the error with the Demo application.

Workaround: change the DropDownStyle property to DropDownList:

private void radPropertyGrid1_EditorInitialized(object sender, PropertyGridItemEditorInitializedEventArgs e)
{
    PropertyGridDropDownListEditor editor = e.Editor as PropertyGridDropDownListEditor;
    if (editor!=null)
    {
        BaseDropDownListEditorElement editorElement = editor.EditorElement as BaseDropDownListEditorElement;
        editorElement.DropDownStyle = Telerik.WinControls.RadDropDownStyle.DropDownList;
    }
}