I cannot figure out if this is a limitation of Team Services or I haven't been able to find it yet. I am trying to make a simple change to some of the reasons that are available based on the transition between states in VSTS. I cannot seem to find anywhere that this is possible and importing the XML seems to not work at all for Team Services online. Is this level of customization not supported in Team Services?
This is currently not available. Over the past months more and more features have been ported from the old XML process templates to the new Process customization system. So it may be coming soon.
Not sure whether it'll be part of "2017 Q1 VSTS work item process customization – identity fields, lightweight rules", but it may be. I suggest submitting a feedback item on: