The purpose of the select bus service is to improve bus speed and reliability, as well as enhance the customer experience, by having customers pay for tickets prior to boarding.
This allows the customer to enter any of the bus doors and also removes the slow wait for customers to pay while boarding.
To show your ticket to the bus inspector on the way out of the bus is a small inconvenience compared to the time saved.
Regarding the legality, your questions are good and you can ask a lawyer.