Im trying to have a ticket tagged when entity type customer is selected but its not working…
Use Ticket Entity Changed event instead of Entity Selected.
That worked… What is Entity Type Selected used for?
Well Entity Selected fires outside ticket so it probably fired before ticket was created… You can use it for various other automations outside of a ticket. In your case you needed something inside a ticket so Ticket Entity Changed rule works.
PS A good way to find out what it does and when it executes is to use a simple Show Message action.