The "content selection" option is quite limited, since it doesn't take into account the translations of the same node.
For instance, suppose I have a list of news items, some in Italian, some in English, and some in both languages, and that the default language of my site is English.
If I set the "content selection mode" to "Only current and default languages and no language" an italian user browsing the list of news will find the same item A twice, once in English and once in Italian (if both translations of A exist). I would expect him to see only the italian version.
The default version should only be used as a fallback, in case the same content does not exist in the preferred version.
I looked at the drupal code, and it seems to me that such an option is quite hard to implement. But if someone has any hints, I'm willing to try working on it.