When setting HTML attributes dynamically (with an expression), Sightly guesses your intention to simplify the writing:
If the value is an empty string or if it is the false boolean, then the attribute gets remove altogether.
For instance <p class="${''}">Hi</p> and <p class="${false}">Hi</p> render just <p>Hi</p>.
If the value is the true boolean, then the attribute is written as a boolean HTML attribute (i.e. without attribute value, like for e.g. the checked, selected, or disabled form attributes).
For instance <input type="checkbox" checked="${true}"> renders <input type="checkbox" checked>.
You can then use two Sightly operators to achieve what you want (both work as in JavaScript): the ternary conditional operator, or the logical AND (&&) operator.
Ternary conditional operator
<ul data-sly-list="${items}" class="${condition1 ? 'selected' : ''}">
<li class="${condition2 ? 'selected' : ''}">
Lots of other markup here
</li>
</ul>
Logical AND operator
For that, you additionally have to understand that like in JavaScript, ${value1 && value2} returns value1 if it is falsy (e.g. false, or an empty string), otherwise it returns value2:
<ul data-sly-list="${items}" class="${condition1 && 'selected'}">
<li class="${condition2 && 'selected'}">
Lots of other markup here
</li>
</ul>
As said, in both examples the class attribute will be removed altogether if the corresponding condition is false.