After more testing I could replicate the issue in my environment. However, the postback is not necessary in my environment.

You could replicate the issue in the provided sample by:

1. Expand View Group menu item
2. Close all the expanding menu, by clicking an area outside of the toolbar.
3. Re-expand the View Group menu item.

Since the value expect the value of "123" instead of 123, we could set the value of the WebInput manually in the button onclick event handler. Here is the snippet:

function WebButton1_onClick() {
    var sVal = "123";
    var input = ISGetObject("WebInput1");
    
    input.SetValueData(sVal);
    input.Value = sVal;
}   

Setting the value manually resolve the issue in my environment.

Unfortunately, this property is not explained in detail in the documentation.

The AspNetAjaxSettings is used if user wish to implement Intersoft control in the ASP .NET AJAX environment, for example in an update panel.

The AspNetAjaxSettings.CreatedAtRuntime must be set to true if the control is created during ajax update (i.e. control is not available initially in the first page load)

The AspNetAjaxSettings.UpdateControlScripts is set to true if you would like to ensure the new scripts to be loaded during the ajax update. The AspNetAjaxSettings.UpdateControlStyles is similar, however it is used for the styles / css.

Through email correspondence & sharedview session the issue culprit has been confirmed, the issue is caused by the <xhtmlConformance mode="Legacy"/> in the web.config.

An article regarding this property has been provided in here, this should answer the question about the $ sign separator.