How to modify or define the Feature Symbology for Annotation?
First, understand that Feature Definitions and everything contained underneath them (Feature Symbology, Annotation Group, Element Template, etc.) are initially pulled from the dgnlib when the Feature Definition is first used in that dgn. In that initial use, it copies all the information from the dgnlib to the dgn. Any additional use of the Feature Definition within that dgn uses what is defined from the dgn, not the dgnlib. If you have made changes to the dgnlib and you want to update the dgn, see this wiki.
Second, understand that if you are wanting to Annotate a dgn that is a reference file, the annotation is pulled from the reference dgn. It is not defined by the dgnlib. It is not defined by the current dgn. This video goes into more detail.
To modify, go to Explorer > OpenRoads Standards > dgn name > Feature Symbologies > Select the one you want to edit. Open Properties and edit within the Properties window.