I think the "scrambled" BBC Select service lasted just over a year for whatever reason - maybe the uptake among professionals that the programming was aimed at was very poor. From memory they definitely did continue with a service promoted as BBC Select in FTA form in around 1993-95 before it morphed into The Learning Zone, later BBC Learning Zone.
I've never seen one of those "Selector" boxes myself. Some cynics might suggest that the scrambling of the BBC Select service was intended to be a precursor to an eventual change to fully scrambling BBC1 & BBC2 TV output changing from a licence fee model to a subscription service. Equally cynical might be the case that some within the BBC wanted the scrambled BBC Select service to fail so as to put the brakes on any attempt of doing the former.
It appears that the BBC were experimenting with analogue scrambling systems in the years leading up to the launch of BBC Select - this is a clip from YouTube of an apparent BBC Engineering test in the autumn of 1987 shown after closedown. Looking at the way the picture is scrambled I'm certain that it's Discret being used here.