Code change:
This text does not address who might be allowed to wait for the other guy to make their statement (if both wait, there is a deadlock).
The intention is that neither side needs to wait. The only open issue is whether we want to allow the client to immediately start sending messages after it sends its CSM without waiting for the server CSM similar to the HTTP/2 case. I planned to discuss that on-list when I "advertised" this set of pull requests.
From your message I understand that in HTTP/2 the client can send messages immediately without waiting for the server to respond either. To me it feels like we should be doing what has been done in the HTTP/2 case even though there is a risk that some problems occur when the client sends data in way that the server will subsequently not handle well. If that is the case, the client will have to re-send the data, I guess. For the currently defined options I don't see problems.
When I submitted the original pull request, I also posed a question on the but did not receive a response. One open question is whether we want to allow a client to immediately send messages after sending its CSM without waiting for the server CSM. This would be similar to HTTP/2: URL To avoid unnecessary latency, clients are permitted to send additional messages to the server immediately after sending the client connection preface, without waiting to receive the server connection preface. It is important to note, however, that the server connection preface SETTINGS frame might include parameters that necessarily alter how a client is expected to communicate with the server. Upon receiving the SETTINGS frame, the client is expected to honor any parameters established. In some configurations, it is possible for the server to transmit SETTINGS before the client sends additional frames, providing an opportunity to avoid this issue.
I support not blocking the device until the server CSM. The server can choose to not process messages that are invalid (e.g. too large) and immediately follow up with the server CSM. From the perspective of a cloud and gateway software provider, the CoAP (using TCP/TLS) server will usually be in the cloud or gateway and therefore usually not power constrained. I may be missing other scenarios where a battery powered device is acting as a CoAP/TCP server. Does anyone have plans for any of those scenarios?
NAME added a related comment to (which is closed) From your message I understand that in HTTP/2 the client can send messages immediately without waiting for the server to respond either. To me it feels like we should be doing what has been done in the HTTP/2 case even though there is a risk that some problems occur when the client sends data in way that the server will subsequently not handle well. If that is the case, the client will have to re-send the data, I guess. For the currently defined options I don't see problems.
Michel Veillette points out that a peer that wants to use a new connection has an uncertainty whether a CSM message with capability indications will come or not, so it is hard to decide when to send the first request (either based on default capabilities or waiting for the CSM to come in). One way out of having to do arbitrary waits would be to require the exchange of a CSM message (even an option-less one) after connection setup. The burden is very low, as a minimal implementation would just need to send a constant message of 0x00 0xe1 at setup. This requirement could be stated without giving a sequence, effectively allowing both sides to send the initial CSM in parallel, or it could give the listener the opportunity to not send its CSM until the connection opener has sent theirs, trying to avoid the need to answer right away to a connection setup -- this makes it too easy to scan for ports (OK, we also have a default port, and making scanning harder does not by itself provide any security, but it sure makes life a little harder for the attacker). (To avoid deadlock, the connection opener would not have the opportunity to wait sending the CSM.)
+1 ... especially for Maximum-Message-Size. HTTP/2 has a similar flow for SETTINGS during connection including potentially empty settings: URL URL
No objections. I will create a pull request for review by the WG.

Related discussion:
text: Setting options indicate a setting that will be applied by the sender. <del> Most CSM Options are useful mainly as initial messages in the connection. </del> <ins> A Capability and Settings message MUST be sent by both endpoints at the start of the connection and MAY be sent at any other time by either endpoint over the lifetime of the connection. </ins> Both capability and settings options are cumulative.  A Capability and Settings message does not invalidate a previously sent capability