The feature proved confusing to some users so Google disabled it
Just last month, Google graduated some experimental features from the Gmail Labs section into full-blown features, part of the regular Gmail. Google doesn't do this unless it's very sure it wants to, after all, that's why Labs exists to test features, see what works, what doesn't and what proves popular.The decision to graduate a feature is made after the experiment has proven popular. It's highly unusual for Gmail to disable one of these features after they graduated, in fact, it probably hasn't happened before, until now.
The "Quote selected text" feature has been sent back to Labs as, it seems, it proved a bit confusing to people. "Quote selected text," as the name implies, automatically quoted selected text from the email you replied to.
But it seems that, at least in some cases, people didn't understand what happened. The feature is back in Gmail Labs, you'll find it there if you liked it.
"We've been listening to user feedback since the graduation and have decided to move the feature back into Gmail Labs. Users sometimes unintentionally quoted text they had inadvertently selected, which caused some confusion," Google explained.