As per your query it is not clear that if you have configured RTE plugin on the text component . By default, OOTB text component is not enabled for rich text editing and you have to enable RTE features as per your requirements. If you haven't done that already you can overlay the existing text component and enable RTE by following steps mentioned in following doc :
Configuring the Rich Text Editor - docs.adobe.com
The screenshot in your query is not text editing dialog , instead it is configure dialog-box for the component.
You can toggle in-place editing editor to full-screen in Touch UI to modify text, it doesn't require to open a dialog for the text component , However if you are in Classic UI it will show you a dialog-box.
Thanks for response.
Yes, I have configured it with RTE plugin. And I am aware the I can toggle in-place editing to full screen in Touch UI. But I need both the options. Author/Client wants to enter through dialog also. It was working for me earlier when only these patches were installed:
But when other patches/hot fixes were installed as mentioned in my query then it stopped working. So is there a specific hot fix to fix it or some other way to fix it.