Change Category Widget Dropdown List Select Name

Use the following code snippet, hope it’ll work for you. I’ve tested it on my dev machine and it works just fine.

/**
 * Change product category dropdown placeholder text.
 *
 * Product category dropdown uses selectWoo/select2
 * that's why it's not possible to change the placeholder text using
 * woocommerce_product_categories_widget_dropdown_args filter hook.
 *
 * data-placeholder="" is select2 standard data api.
 *
 * @param string $html Dropdown html
 * @param array $args Dropdown setup arguments
 *
 * @return string Updated $html
 */
add_filter( 'wp_dropdown_cats', function( $html, $args ) {
    if ( $args['taxonomy'] === 'product_cat' ) {
        $html = str_replace( '<select', '<select data-placeholder="Custom placeholder"', $html );
    }
    return $html;
}, 10, 2);