Why team USA didn't select him for the U18's?
Because the vast majority of the IIHF U18 team is the NTDP U18 team by default. They will occasionally add players from outside the program but not usually a lot and often times they're adding players for specific roles.
To add players, the NTDP has to 'demote' players, and while they do so, they don't add /demote all the guys they could. They're fairly loyal to the program guys, although not completely.
IMO they should have added Musty as there are a couple of forwards who are still passengers on the team. But I'd imagine they saw Musty as a purely offensive guy and they felt they didn't need more offense with Smith, Perreault, Leonard, Hagens, Moore, Eiserman already on the team. So they went with the more versatile add (Terrance) and kept the guys more suited for 4th line / PK roles (i.e., Guzzo, Slaggert).