Why was the P&W engine chosen at all ?
The GE option was already certified and all issues resolved on the KC767, why add another unknown ?
Hard to say. The 767 based E-4 AWACS was GE powered also. However, I've heard but cannot confirm that GE wants to stop production of the CF6-80C2 in favor of their GEnX, while P&W was willing to continue producing (and supporting) their PW4064. The KC-46 will be in production for many many years, albeit at a lowish rate compared to typical commercial production rates. Maybe GE was not willing to continue low rate production of an old engine for many more years for just a single application. On the other hand, FEDEX's 767 freighters are GE powered and they'll be in production for quite some time yet.
Maybe P&W gave USAF an offer they could not refuse? P&W does have experience producing an engine at a low rate for a single application. The F-117 (basically a PW2040) that powers the C-17 was produced at a low rate for many years and C-17 was the only application for that engine for about a decade.