Hello!
I checked the latest update notes. Microsoft confirms that the text selection problem on Word for iPad started after recent iPadOS changes. I suggest Updating Word from the App Store and update iPadOS, then sign out of Word, close the app, sign in again, and restart the iPad.
If the issue stays the same, report it through Word by tapping your profile icon, Help and Support, then Contact Support. This sends your report directly to the Word mobile team.