In order to create a custom dropdown for a custom block, first click on an input to edit it.
Then click the gear icon in the bottom right corner, and click options (you can also click read-only to prevent typing in the dropdown).
After that, in the window that pops up, you can start making the dropdown.
Each line is one dropdown item.
The input's return value will exactly be the name of the value.
You can also create submenus:
To add a submenu, simply type the name of the submenu like a normal item, but add "={" in front of it.
Make sure to put a newline after it to work correctly.
Type in the items for the submenu after the ={, like normal items.
Add a "}" after the last item in the submenu. Make sure to put a newline before AND after it to work correctly.
For example, this:
Again, you do not need to right-click the gray area before clicking the gear icon; either works independently: right-click gray or left-click icon, whichever you prefer.