I suppose your application case addresses two different aspects. The first one is the highlighting of the actually selected item. This is controlled exactly as you did by evaluating the Selected state of the particular item. So far it works.
The other aspect (as far as I understood your explanation) should additionally highlight the actually selected item similarly to a push button being pressed by the user. If this is the case, I would handle the Ok keyboard event directly within the item and highlight it accordingly. When the user has released the Ok key again, the item can notify its owner or perform any other action related to it.
Does it help you further?
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