I don't see how they can co-exist without one or the other doing extra steps
If the default was changed to update the text (seems more convenient in general), it would only be one extra keypress to get to the previous search string, if that's what someone was after (focus starts on combo box, arrow to access previous item from history).
[...] clutter the Find dialogue. In addition, I think this is the sort of setting you set and forget
I tend to agree. I think you could probably just change the current behaviour and anybody that even noticed would be pleasantly surprised, but for the unlikely case that someone prefers the fixed search string, you could just add a "Various" preference to make it not update the search string.
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