Well, my hunch is that ROL intends to provide a universal RO, i.e. for all existing machines. If they need to 'isolate' certain RO4/Select functions into stand-alone modules to load on top of RO5 (which should be feasible), they would lose precious development time for their main work - RISC OS 4 development. Furthermore, if ROL need to provide abstracted versions of their (evolving) Select features for RO5, the gap between both lines of RO will continue and likely expand. My opinion is one version of RISC OS for all machines. Castle does hardware + drivers, ROL does the OS. That almost seems to be the case anyway. RISC OS 5 currently is almost at version 5.10 - it took Castle 3 years.
Also, last I heard, the 2004 deal between ROL and Castle still stands. Both parties are to provide code/time/programmer to develop a unified version of RISC OS.
One more thing. I believe we (including me) need to stop referring to Select as if it is something seperate. I now tend to believe Select refers merely to the subscription scheme of ROL. The fact is we are talking about RISC OS 4 when we refer to Select. So, essentially, we are talking about taking something out of RO4 and 'bolting' it onto RO5! Still, to make these things formal, I believe ROL must make things clearer by explaining their work on their website. ROL for dummies style.