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Each customer can have one or more customer statuses assigned (one per category). Which ones are available depends on your configuration. How to do the setup can be found on the page Customer Care - Customer Status
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If the dropdown is disabled, that will mean it is not allowed to manual change the value for this category. Check the configuration to resolve this.
If you don’t see the ‘Change Customer status’ option, this might be because you don’t have the right permission. Please check the permissions.