Essentially, whenever I put an Option element that contains another
element (it's not just Replaceable) at the *start* of a paragraph, it
breaks the paragraph formatting instructions and some of the element
formatting instructions that Framemaker usually knows about. But I can
put Option elements that contain another element anywhere except the
start of the paragraph, and they're fine.
It sounds to me like somewhere in your EDD there is a match
for {first} <option> element under a <para> element and this
is being applied even though you don't want it to be applied in a bulleted
list.