That's an interesting workaround, though I'm not sure if it will completely solve what I'm looking for. If I do it this way, wouldn't the [Direct Entry] field then not have any kind of validation to it since it is not connected to the parent records? What I'm aiming for is essentially the same thing as the multiple-choice dropdown where while you have the ability to manually enter a value, its still limited to the items in the multiple-choice list. Though I suppose I could possibly add some kind of form rule or something to validate the field....
Either way, wouldn't this require two fields on the form? One for manual entry ([Direct Entry]) and another for the record-picker ([Related Parent Regular Method]). I'm building the app for users who are not the most tech-savvy to begin with and I imagine having two fields for the same input value will most likely confuse them.
