With "default-address-selection" knob, the iBGP sessions are not coming up. Following logs are seen on the peer device,

Feb 14 10:45:20.711 switch-2 rpd[8600]: bgp_listen_accept: Connection attempt from unconfigured neighbor: 10.10.10.90+51083

Feb 14 10:45:20.711 switch-2 rpd[8600]: bgp_listen_accept:6545: NOTIFICATION sent to 10.10.10.90+51083 (proto): code 6 (Cease) subcode 5 (Connection Rejected), Reason: Connection attempt from unconfigured neighbor: 10.10.10.90+51083

The IP address 10.10.10.90 seen in the logs above belong to the lo0 interface, however there was no iBGP neighbor configured for this IP on the peer device.

Packet capture with ping and BGP traceoptions shows that the source address used for iBGP session establishment and ICMP source address is different from the outgoing interface IP. The device uses lo0 interface IP when default-address-selection knob is used.

Configuring local-address for iBGP and multihop eBGP sessions, fixes the issue, as the device uses the configured IP instead of lo0. ICMP Pings will still use lo0 if source-address is not used. This is the expected behavior of "default-address-selection" knob.
 

Please refer this link for more information on "default-address-selection".