Don't click Change Selections - instead on that edit page change the participant status from Pay Later to Registered, and then lower down in the Payment Information section change the payment status to Completed.
I've had a similar issue about increasing the waitlist limit. Check that the relevant scheduled job is running: Job.process_participant. This handles processing the waitlist participants. Read more in the User Guide.
You'll also need to make sure that you have a cron job that triggers the scheduled jobs (or you can run it manually).