Huh. I didn't know that.
I thought there was actually no difference between an instanced scene and an inherited scene... because when I think about it, an inherited scene just takes its base nodes and properties from another scene, which is what an instance is (except with editable children turned on by default). Maybe the problem comes from the workflow this implies.
What is the difference between instanced scene and inherited scene?
And that's what I just described. I thought there was no difference. This button also implies that.
In the meantime, instead of "making the instance root" later, you should start by creating your scene as an inherited scene in the first place?
Or ask about that feature in the proposals repo, explaining in detail what you expect would happen when doing this. It must describe all possible cases, because it's possible that it wasnt allowed due to a problem implementing it. For example, it is possible to make an inherited scene if the scene tree is empty, but what happens if you do this while there are nodes in the tree already? What if their name conflict with nodes that your scene will now inherit? I guess that has to be solved.