Apple Pencil navigation returns to iPad Pro with iOS 9.3 beta 5
As promised, beta testers can once again use the Apple Pencil to navigate on iPad Pro with the latest build of iOS 9.3, with functionality restored before the software is released to the public.

With iOS 9.3 beta 5, scrolling once again works fine in any app, as does palm rejection.
The first four betas of iOS 9.3 severely limited the capabilities of the Apple Pencil, removing the ability to scroll or open links or apps. Users who remained on earlier builds of iOS on the iPad Pro continued to be able to accomplish those functions with Apple's official smart stylus.
The absence of navigation support in the first four iOS 9.3 betas led to speculation that Apple was potentially planning to remove the capabilities in an upcoming software update. But last week Apple responded and revealed that the functionality was due to be restored --?a promise the company delivered on with Tuesday's release of iOS 9.3 beta 5.
The $99 Apple Pencil first began shipping last year, intended to serve primarily as a drawing and writing tool. But it also doubles as a stylus for navigating the device, including on the home screen, in menus, within third-party apps and when browsing the Web in Safari.
Apple said it temporarily removed Pencil's ability to act as a finger replacement as it works to refine such functionality.

While the Apple Pencil can once again be used to scroll and open items, there are still some navigation functions that cannot be accomplished with the Apple Pencil. These are mostly relegated to edge-of-screen gestures, like invoking Control Center, Slide Over, and Notification Center.
For a full list of Apple Pencil's capabilities and limitations, see AppleInsider's feature detailing what you can and cannot do with the accessory.

With iOS 9.3 beta 5, scrolling once again works fine in any app, as does palm rejection.
The first four betas of iOS 9.3 severely limited the capabilities of the Apple Pencil, removing the ability to scroll or open links or apps. Users who remained on earlier builds of iOS on the iPad Pro continued to be able to accomplish those functions with Apple's official smart stylus.
The absence of navigation support in the first four iOS 9.3 betas led to speculation that Apple was potentially planning to remove the capabilities in an upcoming software update. But last week Apple responded and revealed that the functionality was due to be restored --?a promise the company delivered on with Tuesday's release of iOS 9.3 beta 5.
The $99 Apple Pencil first began shipping last year, intended to serve primarily as a drawing and writing tool. But it also doubles as a stylus for navigating the device, including on the home screen, in menus, within third-party apps and when browsing the Web in Safari.
Apple said it temporarily removed Pencil's ability to act as a finger replacement as it works to refine such functionality.

While the Apple Pencil can once again be used to scroll and open items, there are still some navigation functions that cannot be accomplished with the Apple Pencil. These are mostly relegated to edge-of-screen gestures, like invoking Control Center, Slide Over, and Notification Center.
For a full list of Apple Pencil's capabilities and limitations, see AppleInsider's feature detailing what you can and cannot do with the accessory.
Comments
I never did and still don't understand the logic here. First of all, you have a second hand you can use to interact with the UI while you're using the Pencil. Second, when I write on my dry erase board I usually use a finger tip to wipe away mistakes as I write or draw - it doesn't take any effort whatsoever to move from pen tip to finger tip. It's literally a fraction of a second.
Let's not also forget that when the device detects the Pencil is being used, it doubles the scan rate, which would cause higher battery drain.
That is very much ON PURPOSE. With the way it is now you can draw/write all the way to the edge of the screen/edge of the app in multitasking. It would be TERRIBLE if every time you got close to the edge of the screen with the Pencil the notification center would jump out or slide over would pull out. I use the Pencil all day every day (used it for about 6 hours straight this afternoon) and it is perfect the way it is.
Apple knows what they're doing here.