To pass a value enclosed in {...} as a literal (as-is) in PowerShell, you must quote it; e.g.:
bcdedit /set "{340E0E1A-01EC-4A33-A850-8D6A09FD4CE9}" description "OS2"
{ and }, unlike in cmd.exe, are metacharacters, i.e., characters that have special meaning in PowerShell when used unquoted (they enclose a script block), which in this case happens to result in { and } simply getting removed.
Quoting prevents that.
Alternatively, you can `-escape the unquoted metacharacters individually:
bcdedit /set `{340E0E1A-01EC-4A33-A850-8D6A09FD4CE9`} description "OS2"
A generic alternative, available since PSv3, is to use the so-called stop-parsing symbol, --%, which passes all remaining arguments as-is, without interpretation by PowerShell (with the exception of expanding %...%-enclosed environment-variable references):
bcdedit --% /set {340E0E1A-01EC-4A33-A850-8D6A09FD4CE9} description "OS2"
Caveat: While --% works as expected if all your arguments are literals, as in your case, in general it prevents you from using PowerShell variables and expressions as / in arguments, and can have other unexpected side effects - see this answer.
Optional Background Information
Unless interpolation of PowerShell variables and expression is needed, --% allows reuse of cmd.exe command lines as-is, without having to worry about PowerShell's quoting (escaping) requirements.
Generally, PowerShell's metacharacters (characters that have special meaning when unquoted) are different from cmd.exe's and much more numerous:
In addition to cmd.exe's metachars.,
& | < >
PowerShell has:
( ) , { } ; @ $ #
<, >, @ and # only have special meaning at the start of a token.
< is reserved for future use, as of PowerShell 7.0
Aside from that, with respect to variable expansion (interpolation):
cmd.exe only expands %...%-enclosed variable names (e.g., %PATH%), whereas PowerShell requires $-prefixed variable names (e.g., $env:PATH or $HOME) or $(...)-enclosed expressions (subexpression operator)
- In both interpreters, variable expansion (and, in PowerShell, also subexpression expansion) is also performed inside
"..." (double-quoted strings).
'...' (single-quoted strings) are literal strings in PowerShell (contents is used as-is, without interpolation), whereas ' has no special meaning to cmd.exe at all.
To treat metacharacters as literals, you have two options: