Change default order status

Hello there, is there a way to change the default order status for orders paid by wallet balance? My goal is to set the order status of new orders received via the wallet payment to ‘On Hold’ instead of ‘Processing’.

I’ve asked this question previously here and found a not so correct way to achieve what I wanted. While the code did change the order status of newly received orders to ‘On Hold’, It wouldn’t let me change the order status to ‘Processing’ through the Orders Page.

What would be the more appropriate way to overcome this issue?