When selecting text from within the courses tool, that course tool selection can't be treated as an attachment point for an existing note. The "attach to current selection" link is greyed out.
To accomplish this, you have to open the actual resource that the course tool is displaying, navigate to the section containing the excerpt shown in the course tool, find and highlight the specific text, then use the original resource's current selection for the attachment.
That's tedious. It would be nice if you could attach right from the course tool.
It's peculiar that you can add a new note from the course tool (which links to the original resource), but you can't attach the current (course tool) selection from within a note.
I suppose that the new note creation works, because the course tool originates the request and passes the original document details to be used for the note.
I assume that the attach to current selection fails, because the note tool originates that request, but doesn't know how to convert the link for the selected text to refer to the original resource instead of the course excerpt.