I have the same issue on my Garuda Linux (GNOME).
It somehow did not happen after creating the file .config/libinput-gestures.conf (by executing the command gestures)
Just an update. I have found another way to exit this broken state when the selection box is permanently open (pictured).
If you tap the screen again (once) in this state, this immediately opens edit mode. Obviously it *shouldn’t*, but it seems that maybe the screen still “thinks” your finger is on the screen somewhere and that this is lifted after the second touch (replicating the press-and-hold) behaviour to open edit mode normally.
On an unrelated note, it is always the top left corner that the selection box opens from. Could be relevant, not sure.