found fix for todo #2

UOP1_Project/Assets/Scripts/Menu/MenuInput.cs

-using UnityEngine;
+using System;
+using UnityEngine;
-	private GameObject _currentSelection;
-	private GameObject _mouseSelection;
+	[SerializeField] private GameObject _currentSelection;
+	[SerializeField] private GameObject _mouseSelection;
+
 	private void OnEnable()
 	{
 		_inputReader.Menu.MouseMoveMenuEvent += HandleMoveCursor;
 		_inputReader.Menu.MoveSelectionMenuEvent -= HandleMoveSelection;
 	}
 
+	/// <summary>
+	/// Fired by keyboard and gamepad inputs.  current selected UI element will be the ui Element that was selected
+	/// when the event was fired.  The _currentSelection is updated later on, after the EventSystem moves to the
+	/// desired UI element, the UI element will call into UpdateSelection()
+	/// </summary>
-		// _currentSelection will be the start UI element, destination is taken care of by the EventSystem for us
+		Cursor.visible = false;
-		DisableCursor();
+		// Handle case where no UI element is selected because mouse left selectable bounds
+		if (EventSystem.current.currentSelectedGameObject == null)
+			EventSystem.current.SetSelectedGameObject(_currentSelection);
 
 		// occurs when mouse is on top of some button, and we hit a gamepad or keyboard key to change the selection
 		var mouseIsOverSelectionStart = _mouseSelection == _currentSelection;
 			// fire pointer exit event because we don't want the button to be in the 'highlighted' state
-			ExecuteEvents.Execute(EventSystem.current.currentSelectedGameObject, new PointerEventData(EventSystem.current),
+			ExecuteEvents.Execute(EventSystem.current.currentSelectedGameObject,
+				new PointerEventData(EventSystem.current),
-		}
-
-		// if mouse has moved from a button to empty space we store its last interactable
-		// if we receive a move command, we use that stored position to recenter focus before the move is executed
-		if (EventSystem.current.currentSelectedGameObject == null)
-			EventSystem.current.SetSelectedGameObject(_mouseSelection);
-	}
+			// update the selection
+			EventSystem.current.SetSelectedGameObject(_currentSelection);
-	private void DisableCursor()
-	{
-		Cursor.visible = false;
+			// the event we fired earlier clears _mouseSelection, reset it here because our cursor is still over the button
+			_mouseSelection = _currentSelection;
+		}
-		EnableCursor();
-	}
+		if (_mouseSelection != null)
+		{
+			EventSystem.current.SetSelectedGameObject(_mouseSelection);
+		}
-	private void EnableCursor()
-	{
-	private void StoreSelection(GameObject uiElement)
+	public void HandleMouseEnter(GameObject uiElement)
+		_mouseSelection = uiElement;
-		_currentSelection = uiElement;
-		_mouseSelection = uiElement;
-	public void HandleMouseEnter(GameObject uiElement)
+	public void HandleMouseExit(GameObject uiElement)
-		StoreSelection(uiElement);
+		if (EventSystem.current.currentSelectedGameObject != uiElement) return;
+
+		// deselect UI element if mouse moves away from it
+		_mouseSelection = null;
+		EventSystem.current.SetSelectedGameObject(null);
-	public void HandleMouseExit(GameObject uiElement)
+	/// <summary>
+	/// Fired by gamepad or keyboard navigation inputs
+	/// </summary>
+	/// <param name="uiElement"></param>
+	public void UpdateSelection(GameObject uiElement) => _currentSelection = uiElement;
+
+	private void OnGUI()
-		// deselect UI element if mouse moves away from it
-		if (EventSystem.current.currentSelectedGameObject == uiElement)
-		{
-			EventSystem.current.SetSelectedGameObject(null);
-		}
+		GUILayout.Box($"_currentSelection: {(_currentSelection != null ? _currentSelection.name : "null")}");
+		GUILayout.Box($"_mouseSelection: {(_mouseSelection != null ? _mouseSelection.name : "null")}");
 	}
 }

UOP1_Project/Assets/Scripts/Menu/README.md

 - they find the MenuInput component by checking the root transform for children with the MenuInput class (can be refactored later)
 
 ##TODO
-- mouse click activates the currently selected UI element (even if the mouse is not over it)
-- if the keyboard or gamepad navigates the selection away from a UI element which the mouse is over, you must move the mouse out of the game object's bounds and re-enter to select it again.
+- mouse click activates the currently selected UI element (even if the mouse is not over it)

UOP1_Project/Assets/Scripts/Menu/SelectableUIElement.cs

 using UnityEngine;
 using UnityEngine.EventSystems;
 
-public class SelectableUIElement : MonoBehaviour, IPointerEnterHandler, IPointerExitHandler
+public class SelectableUIElement : MonoBehaviour, IPointerEnterHandler, IPointerExitHandler, ISelectHandler
 {
 	private MenuInput _menuInput;
 
 	public void OnPointerExit(PointerEventData eventData)
 	{
 		_menuInput.HandleMouseExit(gameObject);
+	}
+
+	public void OnSelect(BaseEventData eventData)
+	{
+		_menuInput.UpdateSelection(gameObject);
 	}
 }

UOP1_Project/Packages/packages-lock.json

       "url": "https://packages.unity.com"
     },
     "com.unity.test-framework": {
-      "version": "1.1.18",
+      "version": "1.1.16",
       "depth": 1,
       "source": "registry",
       "dependencies": {

UOP1_Project/Assets/Prefabs/Menu.meta

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+  userData: 
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+  assetBundleVariant: 

UOP1_Project/Assets/Prefabs/Menu/debug menu controls.prefab.meta

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