Hey there @kylewhitaker! Thanks for the post and the detailed walkthrough. I was indeed able to reproduce this on my end (with the correct pancake options, by the way):
Looks like this is a bug on our end. I verified that after switching the top dropdown away from "other", the "required" field for the text input correctly evaluates to false, but for some reason the parent form still things it's required.
I'll file this with the engineering team and notify you / the thread when it's fixed!