When using a select field for taxonomy fields it uses Select2. An AJAX request is done to get the terms. If loading fails it means that the AJAX request is returning something other than what is expected. This could be because of an error on the server or it could be caused by some output that should not be happening.
If you add custom JS you can inspect the ajax data before and after the request and this might lead you to what the issue might be https://www.advancedcustomfields.com/resources/javascript-api/#filters-select2_ajax_data
