No way to use "highlight selection" when annotating a screenshot?

After capturing a screenshot on macOS Catalina, it's possible to open it up for annotation/markup before sharing or exporting.

The markup toolbar contains a tool button called "highlight selection" which is very frequently what I want to do after taking a screenshot - highlight some part of it, like with a highlighter pen.

However, clicking this button has no effect, and I can't find any way to actually create the selection to highlight.

What am I missing? Or did Apple forget to add a selection affordance to this window?