I think the issue is a combination of problems. The first, Mark already explained. However, if I remember correctly, dynamic form rules and notification triggers look at whatever is in the field. As soon as the record is saved and the selection is logged, QB see's the field as null, as nothing is currently selected in the dropdown.
The solution is to use Marks formula field, and have notifications trigger when the multiple choice field is changed, but the formula field equals your condition.
You can use the formula field for the dynamic rule, but the problem you will have is, as soon as the select from the multiple choice field, it will instantly go read only, which means if they selected accidentally, they are stuck. You only want the rule to go into effect after they save.
Mark might have a better solution for that issue, but I think in the past I have made a checkbox called 'Make Multiple Choice Read Only', then make a dynamic form rule that says 'When the record is saved and the Multiple Choice Field has been Changed to Approved' change Checkbox to Checked'
Then make a second dynamic form rule based off that checkbox (if checkbox is checked, make multiple choice read only). If you do this, you actually don't really need Marks formula.
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Mike Tamoush
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