Avatars uploaded to meet custom fallback requirements cannot be selected as custom fallbacks from the website UI.
Although the deprecation of fallbacks is listed (and active posts on these feedback forums indicate opposition to their removal), I have not been able to find any information about custom fallbacks not being uploadable anymore. Selecting a fallback from in-game has been removed some time back and outlined in an update post, but there is nothing about new avatars uploaded to be elligible as fallbacks being removed. As such, I assume this is a bug.
docs.vrchat.com still lists custom avatar fallback creation process, and the avatar SDK upload panel still lists a notice about an avatar being elligible for fallback or not. Public avatars uploaded a while back, even if uploaded recently, by people I know (and which are not earmarked by VRC as fallbacks, e.g. CZ) are still selectable. It seems only newly created avatars are not selectable.
Documentation and the SDK are incorrect, and if this is a known change that was not announced, this is extremely misleading and I think does nothing positive to the game whatsoever. Although impostors provide an effective, low-effort "quick fix" to avatar performance blocking, they are absolutely not a substitute to the very competent fallback system which incentivizes those who care to create much more optimized versions of avatars at substantially higher qualities than impostors could ever achieve. The feature still existing for avatars uploaded just a bit before is also annoying, as the system clearly remains in place and functional.
Clarification on whether this is a bug or a known change would be greatly appreciated. Indication about whether Support can assist with making an avatar a fallback manually would also be appreciated.