I don't disagree with your logic, but precedent shows otherwise, and many countries have instead made team picks for domestiques to support a medal contender, rather than someone who might crack the top 30, but earned the slot. This is why they added in that top 140 on Olympic ranking rule, to at least put a minimum bar for anyone being selected. This year that's further exacerbated by the presence of the MTR, because some countries earned their second slot through the MTR rankings, and the athletes who were part of that, may or may not be in your top 2 or 3 on the individual ranking. The US is a good example here, if you look at the MTR series through which USAT guaranteed a second male spot, it was largely Kanute & McDowell along with McElroy who earned that berth for USAT, so I get while a third slot might be earned by Hemming holding on to a top 30 ranking, there's still a valid argument for the others as having helped to earn spots for the country. Outside of the top 140 rule, each NF is left to determine their selection criteria, so it was performance at certain races, some it was combination of results, others it was ranking, and others had discretionary picks, and many were some combination of the above. Especially countries with less shot at the individual titles that had a better medal shot in the MTR, it might make more sense for the country to make their picks with that in mind (the relay arguably has introduced more selection shenanigans than the domestique strategy, which GB has famously botched on numerous occasions, and possibly one of the few times it was successfully executed in the OG was Colin Jenkins being selected to domestique for Simon Whitfield).

Bishop had raced so much to try and move up the rankings, with Ali throwing in the towel, and needing 30 hours of travel for a 5th consecutive race weekend and needing a podium and help to get a 3rd slot for GB, he made the decision for his health to drop out of Huatulco.

You'll get no argument from me on merit based selection, but unfortunately international sport is inherently political... and that will always impact selection. Especially where medals/medal potential drives government and sponsor funding for programs, federations are going to engage in some of these shenanigans in order to chase that.