2) In my words, “Highlight” means the red-green highlight. “selection” means the light-blue text. If you switch between “cd” and “abcde” and if no match is found, the “selection” is not changed, but the “highlight” is correctly switched. This is the correct behavior.
3) If EmEditor performs the search every time you click “Match Case” or “Regex”, the selection may proceed to the next occurrence. This may be inconvenience to some users.