I thought I remembered a similar problem, but it was a few months ago. While searching for my car rental for the same upcoming trip to Iceland, I found an email from my spouse complaining about difficulty entering data into the system for his Icelandair ticket. (Email equivalent of bellowing, "Why does this say I need a visa? I don't have a visa!") That reminded me of your post and I came back to answer.

I thought we solved it by entered the details using a different browser (instead of my usual Firefox, I switched to Safari) or maybe the app on a phone, but it was back in January so I couldn't recall exactly.

Today I saw the same issue on Firefox with my booking, but could adjust the APIS data in Safari. Have you gotten this sorted?