How to Get Around this Behavior

In order to work around this behavior, you can set a Boolean flag and cancel the BeforeCloseUp event as shown below.

private bool bool1;
private void PopupContainer_Popup(object sender, EventArgs e)
{
     bool1= true;
}
private void PopupContainer_BeforeCloseUp(object sender, CancelEventArgs e)
{
    if(bool1)
    {
        e.Cancel = true;
    }
}
private void comboDropDown1_LostFocus(object sender, EventArgs e)
{
    bool1= false;
}
private void Form1_Click(object sender, EventArgs e)
{
    bool1= false;
}
Private bool1 As Boolean
Private Sub PopupContainer_Popup(ByVal sender As Object, ByVal e As EventArgs)
	 bool1= True
End Sub
Private Sub PopupContainer_BeforeCloseUp(ByVal sender As Object, ByVal e As CancelEventArgs)
	If bool1 Then
		e.Cancel = True
	End If
End Sub
Private Sub comboDropDown1_LostFocus(ByVal sender As Object, ByVal e As EventArgs)
	bool1= False
End Sub
Private Sub Form1_Click(ByVal sender As Object, ByVal e As EventArgs)
	bool1= False
End Sub

You can set the Boolean value to be false under the Form’s Click event and Control’s LostFocus event so that the DropDown closes for rest of the cases.