This was tested in SharePoint 2013 and 2016.
Had a list with 100,000 items with a State column. I found that some of my users did not know their state abbreviations. (KE is Kentucky?) After cleaning up the "nonstandard" states, I decided to convert the column from Single Line of Text to Choice.
After editing the column and clicking "Choice" I scrolled down and found that the list of choices was already populated!
For this to work for lists with more than the List View Threshold number of items (5,000 by default) you will need to be:
- a server administrator, or
- an auditor (Configured in Web Application settings, and only for under 20,000 items.), or
- working with the list during Happy Hour! (Offically “Daily Time Window for Large Queries”.)
The State column was now available in my Metadata Navigation Settings options.
In the future when importing large amounts of list data I’ll just make the columns that should be Choice as Single Line of Text and then after the import change them to Choice.