OK, I'm glad I asked, because that was not clear from your post. 
Also, the KM Wiki OCR Screen or Image action is really not clear on this. I had to reread it several time before I found this buried in the text:
When reading from the screen, you can get the image from all screens, or from a specific screen or window or area on the screen.
We need to revise the Wiki to make all of this more clear, and show some example screen shots of doing an OCR from other than the Clipboard.
So, to recap:
- KM can OCR a region of the screen as specified in the KM Action OCR Screen or Image action
- But KM can not provide the UI like the macOS to allow the user to select the area, using a mouse, to be OCR'd.
- A simple macro like the OCR -- User-Selected Area by @ccstone can provide the UI to allow the user to select the area, and then use KM to do the OCR.