He did not know what to pick.
Since sabía can be the yo, 3rd person, or usted form of past imperfect saber, in casual conversation does a sentence like this automatically default to the yo form unless otherwise indicated by context?
There is no default. If there’s really no context, like here, then it can be any of those things. But context can be the smallest thing. For example, if it was a single person talking to themselves, that would be enough for me to assume it’s 1st person, but not because of any default. Of course, that assumption could be proved wrong with further context.