This appears to be an issue with the Android 10 implementation on OnePlus phones. The same issue does not happen on the Pixel phones with Android 10.
It appears the phone shows the dialog to change the default SMS app but does not let the app confirm that it is the default SMS app.
In most cases, restarting the phone once after setting SMS Backup & Restore as the default SMS app allows it to continue with the restore.
If the above doesn’t work then SMS Backup & Restore can be manually selected as the default SMS app from the Phone Settings > Apps > Default apps setting. After that, restart the phone and the restore should work.