Adding a stop with an instruction to complete a task then resume the action

There is nothing wrong about having interactive action steps or actions with an  inserted stop.  It is just that those  actions can not be batched their processing is interactive.  Action that can be Batched  need to be fully automatic processes. So all the files will be  processed automatically without the need of human intervention by Photoshop.    Batch action have  fully automated steps with fixed recorded settings.   Often you would want step the have different setting depending  then the recorded settings for the current image content. Therefore you turn on action steps dialogs, or insert stop or inserts menu items to make your action an interactive actions so you can tailor the action processing for the current active documents content. You did not like how select subject may work so you inserted a stop in your  action so you could make a better selection. You stop the action so you then need to restart the action in the step after the inserted stop.   You could have inserted a menu item Select and Mask menu item instead which would be an interactive step that does not stop the action. This would allow you to make your selection interactivity even to try to see how select subject would work but your in control of the select and mask step. When you complete the stop accepting the selection using enter the action continues its processing. All you could do was to complete the select and mask step in Photoshop Nothing else the action never stopped. If you batch the action with Batch or Image processor  you can process all your image  that way however, during the processing of each you will have to manually complets the select and mask step your process is not fulluy automated its an interactive process you manually make a selection for each image file..

However if you add a Stop message  you can not batch your action with Batch or Image Processor.  For the Stop will stop the action which will be reflected to Batch or Image processor and they will mostly note its as an error and move on to next file in the batch. For Batch or Imaged processor would need to terminate their processing  to give you control of Photoshop after the action stop.  If you make a selection and restart the action after the stop step all image processing stops when the action end for  batch or Images processor had to terminate their execution to return of  control of Photoshop back to Photoshop UI interface.

What is your actual problem? Can not use Insert Menu Item? When you choose that item from the Actions panel, small dialogue should appear on your screen with Menu Item : None Selected. Choose menu item and name of that menu item will appear automatically populated in dialogue. Click OK and new step should be created in your action. That is how Insert Menu Item works.

I think you want to insert Stop instead. Use Actions panel menu > Insert Stop. Type message and optionally check Continue what is not very useful for you because you want to pause action. Lastly click OK and new step will be added in your action. I think this step can not be used in batch processing because batch script will not wait for you, if user click Stop that will interupt batch process. That is how things work.

If you want the users toe make ad  selection, The Stop message  hast to Stop the action execution. So the user can use Photoshop UI to make and selection. Once the user does  they can click  Play in the action palette to pick up the action's execution in the action step after the action;s stop massage. Include that information in your stop message.  Make a selection around the subject then click Play in the action palette.