How to display modified text from data member in :items object array for item-title in v-select (Vuetify) dropdown list?

You can use the v-list-item component to customize item-title:

<template>
    <v-select label="User" :items="items" item-title="name">
        <template v-slot:item="{ props, item }">
            <v-list-item
                v-bind="props"
                :title="`${item.title} - ${item.value}`"
            ></v-list-item>
        </template>
    </v-select>
</template>

<script>
    export default {
        data: () => ({
            items: [
                {
                    name: 'John',
                    department: 'Marketing',
                },
                {
                    name: 'Jane',
                    department: 'Engineering',
                },
                {
                    name: 'Joe',
                    department: 'Sales',
                },
                {
                    name: 'Janet',
                    department: 'Engineering',
                },
                {
                    name: 'Jake',
                    department: 'Marketing',
                },
                {
                    name: 'Jack',
                    department: 'Sales',
                },
            ],
        }),
    }
    </script>

if you want to implement more than one line logic you can change it :title='myCustomTitle()' to a method

<v-select 
    label="Select a permission to copy"
    variant="underlined"
    no-data-text="No permission to choose from"
    :items="permissionsToCopy"
    v-model="selectedPermissionToCopy"
    return-object
>
    <template v-slot:selection="{item, props}">
        <v-list-item v-bind="props" style="padding: 0;" :title="convertToReadableText(item.value)"></v-list-item>
    </template>
    <template v-slot:item="{item, props}">
        <v-list-item v-bind="props" :title="convertToReadableText(item.value)"></v-list-item>
    </template>
</v-select>