I am trying to figure this out as well -- it isn't just the the text selection cursor, but I think any cursor. I guess the problem is that the primary cursor doesn't disappear consistently. (It goes away when I start typing, but not while the mouse is moving.) I have 3 possibly related situations, only the last one (remote screen) has started recently:
- big cursor
- two displays
- remote screen
I always use a larger-than-normal cursor, to find it on big displays. When I go to the Accessibility panel to reduce the cursor size now, it doesn't go down to the smallest size any more.
I've been running with two displays a long time without problem, but recently I started using Apple's remote screen capability. (I'm on a 2012 27" iMac, running 10.9.5.) I've used it in lots of different configs this week (one display, two displays, second display powered on or off).
Force-quit of system preferences doesn't fix the problem, but restarting did. Now my cursor is small and there's only one at a time. Increased the cursor size, still no problem.
So my bet is this is a minor bug with the Accessibility software interacting with remote display usage. But hey, your mileage may vary.