There are few kernel config options related to SELinux and enforcing it. I haven't studied the mechanism, or tried to to change those kernel options, but root is needed for too many users currently. If turning SELinux on affects root functionality, that would mean another build without root and SELinux enforcing... but that's not current, first we need to have a stable builds.
I got the red text after i flashed NE5 rom and bootloader was updated. I haven't seen any adverse effects related to it...