At a crucial moment in the 30th frame, with Selby leading 15-14, O’Sullivan smashed the cue ball when in a tight spot before later going on to clinch a memorable 17-16 victory and set up a final against Kyren Wilson.
On commentary at the time, Foulds said immediately after the incident: "It’s just a ridiculous shot, an absolutely ridiculous shot. That’s Ronnie letting himself down, I’m afraid."
- Ronnie O'Sullivan beats Mark Selby to reach final on night of drama and controversy
- Ronnie O'Sullivan courts controversy with 'ridiculous' shot against Mark Selby
After the match, Selby criticised O'Sullivan for play that he felt was "disrespectful" to him and to the sport, but speaking on Eurosport's The Break snooker podcast, Foulds said he disagreed with that assessment.
Mark Selby on Ronnie O'Sullivan: 'I felt it was disrespectful to me and the game'
"Mark is wrong about one thing, it disrespecting him," Foulds said on The Break podcast.
"You can play whatever shot you like out there. You can play whatever shot you like.
It's up to you what you do, you don't have to play the shots that suit your opponent. So Mark has got that wrong.
"But if Mark was not gutted about losing, he would not be the player that he is, and I tell you what, he is back.
"If he can build on this, he has more world titles in him. I wasn't sure about that until this week, but I've changed my mind on Selby - he's back."
Eurosport commentator Philip Studd added: "Every time O'Sullivan did that he came off second best. He was hitting and hoping, but there was no hope.
"If your opponent starts to play that way, who has won? That shows you have got to them.
"Actually, if I was Mark Selby, I wouldn't see that as disrespect, I would see that as O'Sullivan saying, 'you're too good for me in that department, I can't live with you there'.
"So if you think about it, it was actually a back-handed compliment, not disrespect."
'An absolutely ridiculous shot' - Ronnie O'Sullivan smashes cue ball
Foulds believes O'Sullivan is now the 'clear favourite' to win the final against Wilson and thinks that he still has what it takes to perform at his very best.
"He is still the best player I've ever seen, and he's still got it," he said. "This could be his last hoorah and he is cueing like a dream.
It's the greatest ever day in Crucible history. It's like we had two finals on one day. I'll never forget it - nothing caps today.