During the iOS 9.3 beta testing period, iPad Pro users running the update have noticed a disturbing feature removal that limits the functionality of the Apple Pencil. In the current version of iOS, iOS 9.2, the Apple Pencil can be used for navigational purposes, just like a finger. It's possible to tap on buttons, select text, scroll, swipe between apps, access menus, and access general editing controls in non-drawing apps.
With iOS 9.3, much of that functionality has been removed. The Apple Pencil is no longer able to be used for selecting and manipulating text or doing things like scrolling -- it's only available for selecting buttons and drawing, sketching, and writing within apps.

Early on, Apple Pencil users thought the feature removal was perhaps a bug, but full Apple Pencil functionality has not been restored in later betas and the release notes that accompany betas have never mentioned the Apple Pencil's inability to be used for navigational purposes as a known issue. In a recent podcast, Relay.fm co-founder Myke Hurley said he's heard that the decision isn't a bug, but an intentional design decision.
Sources in the know confirm that removing the functionality of the Apple Pencil is a decision inside of Apple. It is not a bug they have overlooked for three betas. It is a decision.
UPDATE: It seems that Apple have mentioned to The Verge that there will be Navigation for Apple Pencil in future Beta's.
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