It seems the selection can only grow and on both sides, which is the main problem.
If they showed the cursor with a different color than the selected text, and if they shrink and grow the selection as you move, I think it could be pretty nice: select the starting point of the selection, and select only what’s in between the original cursor and the moving one.
Alas it’s more like painting a selection at the moment, with an invisible brush.
iOS UI in a nutshell.
You can do most of the things that most users need to do just knowing how to tap icons and swipe up to go home. I don't think it's such a big issue that there are some power user features that you either discover by messing around or word of mouth.
With a traditional cursor, it places an anchor wherever you’ve moused down and then drags the selection around that anchor.
Whereas with Haptic Touch selection, there’s no anchor, so you find yourself selecting text you didn’t mean to. I’m sure that once you’ve gotten used to it, it’s a nice feature; but it’s not intuitive if you’re not accustomed to it (which seems to be the majority of folks).
I could have sworn it used to work like how you'd expect, where it's anchored from the place you started highlighting. I got my first iPhone, the 12 mini, when it came out. So end of 2020, and I thought that was how text selection worked when I first got it, then it seemed at some point, perhaps after an update it started working where it would only grow the selection and you couldn't unselect if you accidentally went too far. I thought they introduced a bug but it hasn't changed since then. I have no source for this, only my own memory, but maybe someone else can tell me I'm correct/incorrect about that?
The current implementation is way too hard to use. Especially if, for example, you're selecting something starting on the far right side of a line to the far left side of the same line. You have to thread the needle of the above and below lines like a game of Operation, because if you go too high or too low, you'll accidentally end up selecting that entire line.