Settings for ‘Selection’ always apply globally, i.e. in all views. Changes are active as soon as you terminate the dialog with ‘OK’. The selection colour defines how selected objects are to be displayed in 2D views. The settings do not apply to 3D views, where selected elements and objects are identifiable by the material turning red.
The ‘Selection radius in pixel’ determines how close to an element you have to click, in order to select it. This is mainly of interest for narrow objects such as lines, dimensions, etc, since normally objects are selected simply by clicking on them.
When the selected tool is active, a selection rectangle can be created by dragging out the rectangle while pressing the left mouse button. All selectable objects are then, dependant on the settings specified here, selected, if they lie totally or partly within the rectangle.