Your sectional endorser should be able to clarify this, but I dont think your interpretation is correct, it not referring to the previous year, by 'previously selected' they mean by the prior selection methods.
These are :
(1) The winner and runner up of the USTA NorCal Sectional Championships : up to 2 players
(2) Players not previously selected that are ranked in the top 5 on the most recently published NorCal Final Ranking Lists
up to 5 players
(3) Up to 3 Wild Card players may be selected
(4) Players not previously selected that are in the top 100 of the most recently published National Standing List
AND who have played to completion at least one USTA NorCal Championship or Excellence Tournament or the
Sectional Championships within the immediately preceding 6 months, selected by order of standing.*
(5) Vacancies will be filled with players from the most recently published sectional Final Ranking Lists, selected
by order of rank.
So, in this case, if the player was not selected to the team via selection method 1 they can be selected by method 2.