If entire model binding is provided, it will come with the suitable events. I would not speculate on their exact nature until a feature is implemented, as I can go really off the mark. Right now, the component does not carry a selected item reference in itself so it can pass it to a handler, it is up to the view model to fetch such a reference.
On the default text - an item with a default value is what "clears" the value in such a scenario, and DefaultText provides that. The DefaultText simply matches the default value of the Value field - for a string that's null. I am attaching a short video that shows how this works below, and also a project you can use to test this. So, you can think of the DefaultText as the TextField of a model you bind to, where the ValueField is the default value for its type. We hide this behind a simle string property so you don't have to stuff your data with padding.
On a clear button - a dropdown list does not have one by design, but a combo box or an autocomplete do as they can be text inputs. A dropdownlist is a <select> element equivalent, but with better design. So, clearing it is done through the DefaultText feature.
As for how Blazor should work - I would personally rather transmit an ID (number, string, guid, whatever my models and data use) than an entire model if I need a lookup. Of course, this is subject to personal preferences, existing APIs and coding approaches. Also, if you need an async operation, you need an async event anyway, plain MVVM binding can't achieve that (barring some fidgeting with nested components and using the ParametersSet event). So, there is no universally correct answer. The DropDownList is, first and foremost, a form component, and so it provides binding to primitive types and validation. Fetching an entire model from it is not in the immediate plans for out-of-the-box support, mainly because it is extremely easy through the OnChange event. As to whether comparing a web technology with desktop technologies is fair, or comparing to a framework that's a decade old, while blazor has been official for one month - that's also a question that does not have a definitive answer in my view.
Lastly, if entire model selection is so crucial to you that you can't wrap it in a component that steps on the dropdownlist for reuse - I'd suggest going with the grid single row selection.
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