I am having the same problem, maybe the following information might be of use.
My emails were coming from my site admin email address, which I don't want, so I set up a new dummy user with a domain email address.
However, this user does not appear in the drop down list unless I make them an administrator. If I do, they appear and I can set them as the email sender. However, if I change them back to Subscriber the email sender reverts to either Post Author or Administrator.
Hope this helps, and it would really be nice to select a dummy account, especially as hackers keep trying to hack into my site all the time (I have login protection thankfully).