I did some more inspection and simplified my panel content to include only the select, similar to you codepen example (which I see you've updated to enable the layer drag), but still the issue persists. There is definitely some issue with the select click events.
In the Event Listeners for the select, with flowEnabled set to false, the "pointerdown" event is defined like this.
This is exactly the same for the select in your codepen. However, when I remove the two "calcite-list" event listeners, the select starts to work. When I set flowEnabled to true and the select works as expected, I don't see those two "calcite-list" events in the "pointerdown" listener.
I'll explore some more and see what I can come up with. In the end, I'll be using the item panel with the flowEnabled option set to true, which will be the best workaround for this issue.