As an author with two books enrolled in KDP select, I didn't know they'd be included in Kindle Unlimited. It will be interesting to see if this has any effect on sales.
They get paid based on number of their reads (that's anyone who reads >10% of their book) as a proportion of number of total reads across the library, calculated against a money pool that Amazon determines month over month and tunes to keep the program attractive.
More details here: