I discovered that I needed to swap the field formatting to “Convert HTML into tags”. I had originally selected “No formatting” — which I had assumed would result in a straight pass-through of code.
Did the functionality of these configurations change at some point? I don’t remember ever selecting “Convert HTML into tags” in the past.
Edited my previous answer above.
Under “Location” rules for the Field Group I had not selected “Options” from the dropdown. End-of-the-day oversight on my part.
As a suggestion, maybe the error message on the Options page should tell users how to configure a Field Group to use with “Options”. If I’d had a hint that I needed to explicitly set a group to “Options” I might have avoided the confusion all together.