This issue was reported on the Ubuntu MATE bug tracker and reposted here for completeness.
Only two of the possible three window focus modes can be selected via System -> Preferences -> Windows - Window 'Window Preferences' -> Tab 'Behaviour'
The twos that can be can be selected are one marked (sloppy) 'Select windows when the mouse moves over them' or not (click).
If 'Select windows when the mouse moves over them' was marked, the window closed and opened again, the marking is no longer available.
In the 'dconf Editor' under 'org.mate.Marco.general focus-mode mouse' but allows selection of three ways: click, sloppy or mouse
window properties: make all three window focus modes selectable