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For whatever reason, settings selected in the settings menu don't stay selected. I switch the model to LM Studio, put localhost as the IP (the model is running on the same computer as the game) hit enter, return to the game, then when I go back into the options menu it's defaulted back to OpenAI

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I don't know if this is the issue, but if you're running the game and LM Studio on the same machine, try to use "localhost" instead of an IP address. No port, I believe.
Maybe the issue you're seeing is because it's failing to connect and some weirdness happens from that. I will investigate- thanks for letting me know.

But for anyone else looking, when using them both on the same machine, LM Studio expects the HTTP requests are getting sent to "localhost" instead of an IP address.

You can see this too in LM Studio- in the tab for hosting a model locally, there's a python example in the upper right corner that will show localhost as the IP address for the HTTP requests. That's basically how it's structured under the hood.