We make $n$ insertions and each insertion targets a list of size $k\le n$, so we can make a binary search which takes maximum $\log k\le \log n$. So why isn't the running time of selection sort $O(n \log n)?$
Selection sort proceeds by finding the smallest unsorted element and adding it to the end of the sorted section of the array. You can't use binary search to find the smallest unsorted element, because binary search only works on sorted lists.
Your question seems to be based on the mistaken understanding that selection sort takes the first unsorted element and inserts it into the correct place in the sorted list. The correct place could then be found by binary search but the problem with that attempt at an algorithm is that you need array-like access to the sorted portion for binary searching it, and list-like access for inserting in the middle.