Hi Ben
I tried the same thing, but it did give me the options:
Did you update your template to use the key?
photoshop_extension:
type: str
choices:
psd: Photoshop (.psd)
psb: Large Document Format (.psb)
default: psd
alias: extension
....
photoshop_asset_work:
definition: '@asset_root/work/photoshop/{name}.v{version}.{photoshop_extension}'
And did you restart the integration or Photoshop?