Related issue

Issue reported here #16805

Changes rationale

To handle updateOn setup with blur value, the following changes have been made:

1. Adapting the onInputBlur conditionally calling onModelTouched only if forceSelection is false.
2. Adding onModelTouched call in the onSelect ( unconditionally ), which provides the FormControl / FormGroup the value selected by the user, without considering the text input the user is searching ( unless forceSelection is false ).

Additional notes

This way was chosen because NG_VALUE_ACCESSOR updates the ancestor calling registerOnTouched which by angular docs:

When implementing registerOnTouched in your own value accessor, save the given function so your class calls it when the control should be considered blurred or "touched"

If forceSelection is set to false and updateOn is set as blur, upon both user input text / search and when user selects an option, the FormControl and FormGroup will be updated.