Found a solution via Microsoft case.
1. Create a solution and add your model-driven app to it.
2. Enter the App Designer and click on Entities in the right-hand Components tab under Artifacts.
3. Mark the Property Option Set Item and click 'Save' above the Components tab in top nav.
4. Click 'Back' right under the Components tab and then click on 'Forms' under 'Entity Assets' and under then Entity list, select 'Property Option Set Item'.
5. Mark both forms and Save the app.
NOTE: I have noticed the screen behavior can be squirrely. Keep trying and refresh.
6. Publish the app.
7. Go to your Dynamics 365 app and go to a Product that is in Draft or Under Revision.
8. Click on the Product Properties tab.
9. Go to, or create, a Product Property that is an Option Set.
10. Go to the Properties tab.
11. Click on the ellipsis next to 'Property Option Set Items' and click on '+New Property Option Set Item'.
12. The Quick Create form should now pop up instead of the main form (that has all fields as read only).
13. Enter a Name, Value (expects a whole number from 1 up), and Description. Click 'Save and Close'.
14. The new value should be added now.
Regards,
Denni Conner, Architect
Hitachi Solutions America
