In the description of the paragraph "Configuring the ruler" where in the YAML is referenced the point "2", the description provided is "Add a custom label that can be added to namespaces where you want to enable the use of logging alerts and metrics."

However, the selector "spec.rules.selector" does not pick namespaces, but it selects alertingrule.loki.grafana.com/v1 resources instead. 

The definition is exactly the same that the one for the selector "spec.rules.namespaceSelector", which is correct. First, the ruler picks a namespace based on the label matching this rule, and within those namespace, selects later on the AlertingRule resources which have labels matching the rules defined in spec.rules.selector.