Forget the select element/options elements - they’re set to css display:none, meaning they’re not accessible by WebUI.selectOptionBy* APIs.
BTW, you cannot pass an xpath expression directly to findTestObject, but that’s not really the issue here.
You need to deal with the UL/LI construct directly using WebUI.click(). It’s not clear from the HTML you posted, which element will make the element “drop down”. Find it using the devtools and create a TestObject for it (if you haven’t already). Then you can issue a click on it (after you have scrolled to it if necessary).
Once you have the list opened up, then you can target the relevant LI element with another WebUI.click()