I raised a support ticket and support/engineering teams suggested to enter an idea.

When bulk editing a customer payment journal method of payment, the drop down for the field is showing vendor method of payments instead of customer method of payments. From what engineering explained, the bulk edit uses the lookup defined on the field. It appears that the lookup is overridden on the customer payment journal grid to show the proper method of payment but when bulk editing it shows vendor.

Suggested change is to change how the bulk edit works to leverage the lookup defined on grid control rather than the lookup defined on the table field/EDT.