I have encountered problems with IB bookings seat selections on the MAD-LHR route with IB operated flights with seatmaps under random BA/IB control on the websites, but this is a new one:

Just made a booking on Iberia Express OVD-LHR-OVD. Ignored offered to purchase seat selection (as OW sapphire have this privilege for free) and proceeded to complete booking. Strangely, in Manage my Booking on IB's site, option to select seat not shown.

When accessing the booking on BA's site, when you choose to access seat selection it diverts you to IB's site for the outbound sector (OVD-LHR) where you can select the seat. However once you do that a dialog box comes up saying there is an error.

The inbound segment appears to be operated by BA. Here you are allowed to choose seats on BA's seatmap immediately in front of and behind the exit row, but no others.

A BA telephone agent confirmed that both flights are actually operated by IB express and was able to confirm the desired seats for me.