There are two edit modes when adding or editing text annotations: Inline Editing and Editing in a Popup. You can toggle between these two edit modes by tapping on the arrow button.
Xodo will use your last edit mode as a preference and all future text annotations will be edited and created in that mode. For example, if you are a big fan of editing in the dialog, once you toggle to that state, all future text annotations will be opened with the dialog.
Editing in a popup