The way the Selection Panel indicates what is current displayed can be improved:

• The selected thing is often highlighted in blue (because... well... it's selected), which is confusing (looks interactive when it's actually not).
• The selected thing sometimes appears second instead of first.
• The styling is inconsistant with the left sidebar.

The top section should be reworked such that:

• The selected item is always on top.
• The selected thing should be displayed as a (full width) title bar using ListItem, with all possible context (icon if Space View, note on the nature of the thing, etc.—see figjam).

WIP conceptual proto (misses lots of UI element):

Relevant FigJam: https://www.figma.com/file/4ypyTDAAu1RmFcPocpiPB5/Selection-Panel-cleanup?type=whiteboard&node-id=0-1&t=eKgC0PjaOa3woiE2-0