I didn't know some TV accepted component cable but without being able to output progressive signal.
It's like having an hdmi port and allowing users to connect their HDMI HD capable devices but don't output anything else than 480i
I understand that it's not mandatory to have HD output when you have HD input, but that's just a little weird. I guess it's for cost production, and providing low cost devices to the public.
About the Selector you are right.
I was thinking about the 50/60Hz (still interlace, often available in PAL games to go from 576i to 480i), not about interlace/progressive choice.
If you force the PAL 480p in the loader, the game detects 60Hz and doesn't display the 50/60Hz selection screen.
But the interlace to progressive is always displayed.