[doublepost=1511143137][/doublepost]I have the same issue (late 2016 15" MBP with the Radeon 4GB) - and saw the same thing at the apple store, the display there had a 13" 2017 MBP (specs unknown) and the "rotation" drop down was there and it worked. I also saw it on a Mac Pro on display. The guys there had no idea why it wouldn't work. The guys at the store said to try a PRAM reset, so I went to my office and did that and it still wasn't an option (regardless of whether I had one or both monitors connected to my computer.
I then called AppleCare when I was at my office today - they were clueless, said it was a hardware compatibility issue, etc. and I said well then why does it work at the store to which they had no response. I confirmed my monitors were using 3.04 and LG manager was updated. I always had one of the displays and never tried to rotate it, so I don't know when or if the option to rotate went away (if it was ever there).
I also plugged in a 2017 13" MBP w/ TB to one of the monitors, same issue.
This is the only forum that I have found which recognizes the issue, but I sure wish there was a fix. ScreenRezX doesn't do it. I am going to stop at the apple store tomorrow and try plugging in my computer and try and get to the bottom of this. I'm tempted to try the scorched earth approach and just reinstall OSX and see if it works on it.
I will try to report back if I get anywhere.
@Maflagulator - I don't know where you live, but it's really funny you have the same issue I do and we've both essentially taken the same steps to try and resolve it.