I'm also experiencing the same issue as OP. When I attach my OW emerald to the booking, I'm unable to select any seat without it charging. At first, it shows the available seats as $0, but when I go to confirm, it recalculates and tries to charge me for the seats. I've swapped the FF number to my Qantas bronze and I'm allowed to select seats for free, albeit with a smaller selection compared to OW emerald.
I thought OW emeralds get a better selection of free seats than Qantas bronze.