Alright. I've read about IP conflicts, which isn't even an overlapping CIDR range, between not-bridged ISP equipment and the LAN IP one are trying to set on Nest Wifi is cause of custom LAN IP to be saved. But here there are no double NAT. My understanding is that any RFC 1918 /24 CIDR range should work, but documentation is unclear, and no helpful error message is given in the Google Home app.
I'll escalate this thread.
Edit: It was already escalated.
Edit 2: Could be that you have other settings set that could interfere with changing the LAN IP, for instance DHCP reserved IP, and/ or port forwarding? Setting custom LAN IP should be one of the first things to do after setting up a Nest Wifi puck first time to avoid edge cases like this.
Sorry for the late response here, but I wanted to check in to see if you were still having this issue and to see if you have done any additional troubleshooting. If you still need help, let me know and I'll be happy to work on this with you. I appreciate the help on this one, olavrb.