how to choose custom text tone in IOS17

That is the current state of affairs. It's not clear if this is a bug or an intentional change at this time.

I suggest that you submit feedback to Apple:

Product Feedback - Apple

Note that iOS 17 may not yet be an option for selection in the drop down menu. Just make sure it's in the text box. 

nnagle wrote:

It IS a bug. Please file report with apple support. I have. They said there are very few reports so far. Please report it!

You may not have noticed but I'm the person who keeps posting the feedback link and telling people to use it. So, yes, I've submitted feedback.

No one you talk to on the phone is going to have access to the information in the feedback portal.

It IS a bug. Please file report with apple support. I have. They said there are very few reports so far. Please report it!