I have partially answered my own question, however, I have found two issues with this.
I have found that the product can be expanded within the list to show the variants, but ONLY if navigate the category tree and find the product manually. If I start typing the name of the product, to filter the list so that I can find the product faster, it is not expandable. Given that I have a lot of product I always filter the list to make finding products faster.
The second issue is that I did end up selecting the variant properly for the coupon, but the coupon code can't be used. All I get is the error:
The coupon you entered cannot be used for the products in your cart
I have the correct product variant in the cart, and the correct product variant selected in the coupon. Not sure what the issue is.
Any ideas what is wrong?