Make Read Only Form Rule not Sticking to Conditional Drop Down Field on Form

I am surprised that you were saying that it works fine on a text field. The way I understand form rules the concept of make read only When the record is saved does not make sense. You need to set up a condition based on other conditions being true in order to cause a field to become read only.  In other words rebuild your form rule but not based on "when the record is saved"