Your recruiter was right regarding the "no preference but would prefer Navy." It does nothing to decrease your chances on selection, only works to communicate where you'd like to serve. If an applicant selects "Army only" or "Navy only" then that does limit their choices. Branching to the Army and Navy selection is chosen at the selection board and applicants go through either Navy ODS or Army BOLC prior to the start of the DPT program. It is not done at graduation.
This applicant cohort is no trial case, PTCAS has worked exactly as we planned it to work within our recruiting and admissions program. Recruiters can't know where you are on the OML, nor should they. If they knew more about board results then that might affect how you are treated. In years past, applicants had to provide recruiters with paper copies of transcripts and GREs in addition to letters of reference. Not a very efficient process, nor fair, particularly for waitlisted applicants. The DPT program in San Antonio now has full visibility of the entire cohort through PTCAS.
The way that applicants and those on the waitlist is being handled is to preserve your rights to be fully considered, if we can make you an offer. We also are sensitive to your rights to be considered next year if you choose to apply again. Applicants must consider that DPT recruiting and admissions, for all programs, is extraordinarily competitive and our program, in particular, must evaluate applicants across a wider range of characteristics than academics and observation hours.