Thanks for you reply.
As per dpkg -l | grep Qt, I seem to have version 5.12.8 of the Qt5 library installed.
Oddly enough, if I start from scratch again with the same base spritesheet, select 'From Grid', I can easily select with the left mouse button.
Comparing the two files, I noticed that my original file has "height": 64 while the new file has "height": 928, which is the correct height for the spritesheet image. So it looks like somehow the file height was mis-calculated or something. The "width" was also set to 64 when it should be 256 pixels.
I wonder if changing the grid size caused this issue somehow?
This is definitly the problem, as I can select regions with the mouse for the first 4 rows only (64 pixels).