The difference is I am not using bookmarks. I am using Desktop Version: 2.74.5619.621 64-bit (October 2019).
Other solutions to this issue such as switching off the visual header or editing the slicer in Power BI Service have not resolved the bug.
When I edit the slicer in Power BI Service and change it from List to Dropdown it looks fine until I save the Report and switch back to reading mode. When I make the switch to reading mode the dropdown automatically reverts to a list.
Please take a look at the screen recording of this issue.