Taxonomy Drop down or single line text ?

I'm a little confused as to what you are asking.

The Single Line Text field is not a Post Field, it's a Standard Field used for capturing basic text that the user submits in the form in that field. It isn't a Post Field.

Are you referring to the input that appears if you enable the enhanced UI on a drop down or multi-select field? If so, that isn't a Single Line Text field. It's simply a text input they can use to search the drop down or multi-select items and to show what they selected.

Sorry, but i'm not entirely sure exactly what you are asking and what fields are involved. Can you try and clarify and explain things in a different way?

Or, what might be helpful, is create a quick screencast using the free Screenr service at http://screenr.com and provide us with a quick screencast where you can tell us and show us what you are referring to. That would be very helpful and it's easy to do.

Then you can reply back here and provide the link to your screencast so we can take a look at it.

I'm still confused when you refer to a Single Line text field and taxonomy. The Single Line text field CAN'T handle hierarchy because it's a text input. The user types in the value. It's not a selection field. They don't select from any values. So how can it show hierarchy when it doesn't show values? It's simply an input field where the user types in a value. Nothing more.

What you are using is not the Single Line Text field. It's a Multi-Select field with the Enhanced UI option enabled. It is a drop down field with multi-select enabled and the enhanced ui option uses CSS and jQuery to present the select field using a custo interface.

I also noticed that your form is not styled properly. It appears the Gravity Forms CSS stylesheet is not being output. The fields aren't styled properly and the contents of the drop down are all being displayed on the page. The drop down values shouldn't be visible until you start typing in the input box, at which time only matching items would be displayed.

You will want to check to make sure that Gravity Forms CSS output is enabled on the Settings page of Gravity Forms. If it is, then you need to make sure your theme has the wp_head() function in it's header.php file and the wp_footer() function in the footer.php.

As for the issue you are having with typing in "Hollywood" and it not finding the item due to the dashes, I can look into this. The issue is there is no space between the last dash and the name of the taxonomy.

We can correct this by updating Gravity Forms so that when it returns taxonomy that has hierarchy it includes a space after the last dash and the term. I will see that this is included in the next Gravity Forms update.