Select By Location fails with XY event layer

I create an XY event layer in GCS_WGS_1984.

Using this layer as the selecting features in Select by Location fails with a 999999 error.

If I use this layer as the target, or in Buffer, the tool fails with 000339: ...does not have OIDs.

Is this why it is failed in Select by Location? I inherited a python script that was written to use such as layer as the selecting features. Did this used to work? Why doesn't it now? I would think that the OIDs for the selecting layer should not matter.