Created redmine issue http://projects.theforeman.org/issues/14364 from this bug

Moving to POST since upstream bug http://projects.theforeman.org/issues/14364 has been closed
-------------
David Davis
Applied in changeset commit:katello|17a42c0e4de23013ccdb4db79a4f5c32938e6239.

VERIFIED
on sat6.2.0 Beta (GA10.1)

UI provides a dropdown menu now

CLI:
# hammer -u admin -p changeme settings set --name default_download_policy --value foo
Could not update the setting:
  Value is not included in the list
# hammer -u admin -p changeme settings set --name default_download_policy --value ""
Could not update the setting:
  Value is not included in the list
# hammer -u admin -p changeme settings set --name default_download_policy --value "immediate1"
Could not update the setting:
  Value is not included in the list
# hammer -u admin -p changeme settings set --name default_download_policy --value "immediate"
Setting [default_download_policy] updated to [immediate]


API:
[root ~]# curl -k -u admin:changeme  -H 'Content-Type: application/json' -X PUT -d '{"value": "on_demand"}' https://sat6.server.com/api/v2/settings/29
{"value":"on_demand","description":"Default download policy for repositories (either 'immediate', 'on_demand', or 'background')","category":"Setting::Katello","settings_type":"string","default":"immediate","created_at":"2016-05-02 09:20:52 UTC","updated_at":"2016-05-09 09:09:14 UTC","id":29,"name":"default_download_policy"}

# curl -k -u admin:changeme  -H 'Content-Type: application/json' -X PUT -d '{"value": "foo"}' https://sat6.server.com/api/v2/settings/29{
  "error": {"id":29,"errors":{"value":["is not included in the list"]},"full_messages":["Value is not included in the list"]}
}
 
[root ~]# curl -k -u admin:changeme  -H 'Content-Type: application/json' -X PUT -d '{"value": ""}' https://sat6.server.com/api/v2/settings/29
{
  "error": {"id":29,"errors":{"value":["is not included in the list"]},"full_messages":["Value is not included in the list"]}
}

[root ~]# curl -k -u admin:changeme  -H 'Content-Type: application/json' -X PUT -d '{"value": "immediate_lol"}' https://sat6.server.com/api/v2/settings/29
{
  "error": {"id":29,"errors":{"value":["is not included in the list"]},"full_messages":["Value is not included in the list"]}
}

[root ~]# curl -k -u admin:changeme  -H 'Content-Type: application/json' -X PUT -d '{"value": "immediat"}' https://sat6.server.com/api/v2/settings/29{
  "error": {"id":29,"errors":{"value":["is not included in the list"]},"full_messages":["Value is not included in the list"]}
}

[root ~]# curl -k -u admin:changeme  -H 'Content-Type: application/json' -X PUT -d '{"value": "immediate", "foo":"bar"}' https://sat6.server.com/api/v2/settings/29
{"value":"immediate","description":"Default download policy for repositories (either 'immediate', 'on_demand', or 'background')","category":"Setting::Katello","settings_type":"string","default":"immediate","created_at":"2016-05-02 09:20:52 UTC","updated_at":"2016-05-09 09:09:54 UTC","id":29,"name":"default_download_policy"}

Since the problem described in this bug report should be
resolved in a recent advisory, it has been closed with a
resolution of ERRATA.

For information on the advisory, and where to find the updated
files, follow the link below.

If the solution does not work for you, open a new bug report.

https://access.redhat.com/errata/RHBA-2016:1501