I think it would make more sense if dropdown times remain the same even when user enters a custom time, such as 2:34 PM.
For example, say you have increments of 60 and default time of 11. The drop down would should you:
and so on. Looks okay.
However, if the user types in 1:15 PM then the drop down changes to:
and so on. Still looks okay.
This is further highlighted when the user types in a "not so good looking" time such as 2:34 PM. Then the dropdown displays:
and so on. How likely am I to pick 4:34 PM?
Although completely opinionated, I would think it makes more sense that they stay the original 2PM, 3PM, instead of 3:34PM which I think a user would be very unlikely to pick.
Thanks for reading!