diff --git a/frontend/src/lib/components/AddUser.svelte b/frontend/src/lib/components/AddUser.svelte
index 75c69a440b..4bebf7794c 100644
--- a/frontend/src/lib/components/AddUser.svelte
+++ b/frontend/src/lib/components/AddUser.svelte
@@ -119,23 +119,27 @@
 					items={instanceEmails}
 					bind:value={email}
 					placeholder="Select or type an email"
-					createText="Use custom email:"
-					onCreateItem={(v) => {
-						email = v
-					}}
+					allowUserInput
 					disablePortal={true}
 					error={!!emailError}
 				/>
 			{:else}
-				<TextInput inputProps={{ type: 'email', onkeyup: handleKeyUp, placeholder: 'email' }} bind:value={email} error={!!emailError} />
+				<TextInput
+					inputProps={{ type: 'email', onkeyup: handleKeyUp, placeholder: 'email' }}
+					bind:value={email}
+					error={!!emailError}
+				/>
 			{/if}
 			{#if emailError}
-				<span class="text-2xs text-red-500 mt-0.5">{emailError}</span>
+				<InputError error={emailError} />
 			{/if}
 
 			{#if !automateUsernameCreation}
 				<span class="text-xs mb-1 pt-2 leading-6">Username</span>
-				<TextInput inputProps={{ type: 'text', onkeyup: handleKeyUp, placeholder: 'username' }} bind:value={username} />
+				<TextInput
+					inputProps={{ type: 'text', onkeyup: handleKeyUp, placeholder: 'username' }}
+					bind:value={username}
+				/>
 			{/if}
 
 			<span class="text-xs mb-1 pt-6 leading-6">Role</span>
@@ -172,7 +176,9 @@
 						username = undefined
 					})
 				}}
-				disabled={email === undefined || !!emailError || (!automateUsernameCreation && username === undefined)}
+				disabled={email === undefined ||
+					!!emailError ||
+					(!automateUsernameCreation && username === undefined)}
 			>
 				Add
 			</Button>
diff --git a/frontend/src/lib/components/DBManager.svelte b/frontend/src/lib/components/DBManager.svelte
index 3000eb2d5f..b57edefc51 100644
--- a/frontend/src/lib/components/DBManager.svelte
+++ b/frontend/src/lib/components/DBManager.svelte
@@ -252,7 +252,6 @@
 					transformInputSelectedText={(s) => `Schema: ${s}`}
 					RightIcon={ChevronDownIcon}
 					placeholder="Search or create schema..."
-					showPlaceholderOnOpen
 					onCreateItem={(schema) => {
 						schema = schema.trim().replace(/[^a-zA-Z0-9_]/g, '')
 						if (dbType === 'snowflake') schema = schema.toUpperCase()
diff --git a/frontend/src/lib/components/select/Select.svelte b/frontend/src/lib/components/select/Select.svelte
index f57f21c300..3ba4b37b06 100644
--- a/frontend/src/lib/components/select/Select.svelte
+++ b/frontend/src/lib/components/select/Select.svelte
@@ -42,7 +42,7 @@
 		itemLabelWrapperClasses,
 		itemButtonWrapperClasses,
 		size = 'md',
-		showPlaceholderOnOpen = false,
+		allowUserInput = false,
 		transformInputSelectedText,
 		groupBy,
 		sortBy,
@@ -76,7 +76,8 @@
 		itemLabelWrapperClasses?: string
 		itemButtonWrapperClasses?: string
 		size?: 'sm' | 'md' | 'lg'
-		showPlaceholderOnOpen?: boolean
+		/** When true, any text typed by the user becomes the value when the dropdown closes */
+		allowUserInput?: boolean
 		transformInputSelectedText?: (text: string) => string
 		groupBy?: (item: Item) => string
 		sortBy?: (a: Item, b: Item) => number
@@ -99,6 +100,23 @@
 		return untrack(() => processItems(args))
 	})
 
+	let valueEntry = $derived(value && processedItems?.find((item) => deepEqual(item.value, value)))
+
+	let rawLabel = $derived(valueEntry?.label ?? getLabel({ value }) ?? '')
+
+	let displayText = $derived(transformInputSelectedText?.(rawLabel) ?? rawLabel)
+
+	let inputValue = $derived(open ? filterText : displayText)
+
+	let hasFilteredItems = $derived(
+		!filterText ||
+			processedItems?.some(
+				(item) => !item.__is_create && item.label?.toLowerCase().includes(filterText.toLowerCase())
+			)
+	)
+
+	let dropdownVisible = $derived(open && (!allowUserInput || hasFilteredItems))
+
 	$effect(() => {
 		if (filterText) open = true
 	})
@@ -107,15 +125,13 @@
 			filterText = ''
 		} else {
 			untrack(() => {
-				if (value && !valueEntry) {
-					filterText = inputText
+				if (rawLabel) {
+					filterText = rawLabel
 				}
 			})
 		}
 	})
 
-	let valueEntry = $derived(value && processedItems?.find((item) => deepEqual(item.value, value)))
-
 	function setValue(item: ProcessedItem<Value>) {
 		if (item.__is_create && onCreateItem) {
 			onCreateItem(item.value)
@@ -131,11 +147,6 @@
 		if (onClear) onClear()
 		else value = undefined
 	}
-
-	let inputText = $derived.by(() => {
-		let text = valueEntry?.label ?? getLabel({ value }) ?? ''
-		return transformInputSelectedText?.(text) ?? text
-	})
 </script>
 
 <div
@@ -168,12 +179,8 @@
 		{autofocus}
 		{disabled}
 		type="text"
-		bind:value={() => (open ? filterText : inputText), (v) => open && (filterText = v)}
-		placeholder={loading && !value
-			? 'Loading...'
-			: value && !showPlaceholderOnOpen && !(open && !valueEntry)
-				? inputText
-				: placeholder}
+		value={inputValue}
+		placeholder={loading && !value ? 'Loading...' : placeholder}
 		style={containerStyle}
 		class={twMerge(
 			inputBaseClass,
@@ -182,16 +189,17 @@
 			inputBorderClass({ error, forceFocus: open }),
 			'w-full',
 			open ? '' : 'cursor-pointer',
-			// Show value as placeholder when opening the dropdown and the search is empty
-			!value ? 'placeholder-hint' : '!placeholder-primary',
+			'placeholder-hint',
 			(clearable || RightIcon) && !disabled && value ? 'pr-8' : '',
 			inputClass ?? ''
 		)}
 		autocomplete="off"
 		oninput={(e) => {
-			// Explicitly open dropdown if closed and update filterText
 			if (!open) open = true
 			filterText = e.currentTarget.value
+			if (allowUserInput) {
+				value = filterText || undefined
+			}
 		}}
 		onpointerdown={() => (open = true)}
 		bind:this={inputEl}
@@ -200,7 +208,7 @@
 	<SelectDropdown
 		{disablePortal}
 		onSelectValue={setValue}
-		{open}
+		open={dropdownVisible}
 		{processedItems}
 		{value}
 		{disabled}
diff --git a/frontend/src/lib/components/workspaceSettings/CustomInstanceDbSelect.svelte b/frontend/src/lib/components/workspaceSettings/CustomInstanceDbSelect.svelte
index b74d7c9b92..fe5bf10af5 100644
--- a/frontend/src/lib/components/workspaceSettings/CustomInstanceDbSelect.svelte
+++ b/frontend/src/lib/components/workspaceSettings/CustomInstanceDbSelect.svelte
@@ -50,7 +50,6 @@
 		bind:value
 		onCreateItem={(i) => (value = i)}
 		placeholder="Search or create..."
-		showPlaceholderOnOpen
 		items={onlySelectedTags}
 		id="custom-instance-db-select"
 		disabled={!$isCustomInstanceDbEnabled}