How do we allow standard users to be able to change their PIN without elevation? Is this normal?
Yes, this is a current Windows constraint and not related to MBAM or ConfigMgr. The default for this policy is to not allow so not explicitly disabling it means standards users can't change the PIN.
should we use a GPO/regkey locally
What you should do is based on your requirements and security posture. I generally recommend against using a BitLocker PIN at all.
how will this impact the ConfigMgr policy?
ConfigMgr doesn't care or know about this.