"Overwrite selection" currently only affects none persistent selections.
ON (default): If you type new text (or delete), it replaces the selection
OFF: typing new text, will de-select the selection (keep text), and insert the new text
A persistent selection is always kept, and new text inserted without affecting it.
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It has not the identical behavior w/r/t the oldie Ctrl+K B, Ctrl+K K, but close enough for my objectives.
What are the differences?
You are aware that there is Ctrl+K B, Ctrl+K K => allowing you to set the boundaries.
By default Shift-cursor-left/right/up/down will extend/shrink the selection. You can remove those shortcuts from the keymap, if you do not want them.