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The fix for this issue is now available in the latest update to InDesign - InDesign 17.1 available through CCD app.
Please note that you would need to update to the latest macOS Monterey 12.1 also to see this working correctly.
Adobe InDesign team
An error occurred while saving the commentVio commented
I have the same problem. I am running InDesign 16.2.1 and Big Sur.
I can't rename the different states in "Object layer states" and layers. When I click on a name there's a brief flash of an editable name then it goes back to normal uneditable state. I tried renaming in the Layers palette and that seemed to work initially but then started the same behavior.