Hi Rob,
Unfortunately, while the XLSForm specification doesn't mention one or another whether this should be allowed, the XLSForm validation tools Survey123 uses does not allow for 'or_other' to be used with an external select. Given that this can be addressed by adding an 'other' choice to your list and a dedicated 'other' question (which is a more robust solution for translation and to consolidate answers to one field via an if() statement), there have been no developments to address this.