Maybe my use case is not exactly the same, but it has also to do with selection. I could find information in Telerik documentation about using this bar for navigation - you can bind an UrlField to the PanelBar.
However, it is not really useful if the item with matching Url cannot be selected. Or IMO when using this feature with binding, I would actually expect that corresponding item is auto-selected. And it should also work for child items (with auto-expansion).
Or am I missing something?