Hi Danny, here is that previous discussion thread where you can kind of follow the evolution of the selection indicator thingy:
http://moi3d.com/forum/index.php?webtag=MOI&msg=3254.1

Basically the part that really makes sense is having it function similar to the eye icon for visibility. Since you click on the eye icon to toggle it, clicking on the selection indicator area to toggle it seems to make the most sense.

- Michael