Yeah, it looks like the fact that there's a select makes the v-model directive to bound differently. But the :value + @input isn't working correctly either...
Using component instead of select does fix the issue because the render function generated transforms the v-model directive into a :value + @input pair.
thanks for reporting this 🙂

Thanks. I'd also like to add that the same thing is happening for <option> elements:

<option :value="value" is="custom-option"></option>

The value prop is likewise dropped.

That was faster than ever 🚄

I would also like to point out that when I run that fiddle, I get the following in the console window:
[Vue warn]: Avoid mutating a prop directly since the value will be overwritten whenever the parent component re-renders. Instead, use a data or computed property based on the prop's value. Prop being mutated: "val"

This is on Vue 2.3.3