If your team is behind late and you want to foul will the sim actually foul Shaquille or Wilt or will it foul the other team's point guard who knocks down 86% of his free throws?

my guess is that the engine does step 1 and then overrides step 2 and just goes straight to "or be fouled"

from the FAQ

1. We determine who has the ball by looking at every offensive player’s real-life possession rate. This value looks at his real-life field goal attempts, free throw attempts and turnovers. A player’s chance at having the ball for this possession is exactly relative to the real-life possession rates of the other players. If everyone has the same possession rate, everyone will have a 20% of possessing the ball. We use the composition of the team on the floor and the offensive set to determine how much time has come off the clock by the time this decision is made and the possession is terminated.
2. Now that we have picked a player, we must determine what he will do with the ball. There are three things he can do: turn the ball over (3), shoot (5) or be fouled (4). Every player has a real-life turnover percentage, field goal attempt percentage and times fouled percentage that is relative to his total number of actual possessions. At this point, many factors can adjust those percentages and affect whether we go to step 3, 4 or 5. Generally, we will view the chance that he shoots as the amount remaining after modifications to fouled percentage and turnover percentage. These factors include: the man defending the player, the rest of the defense, the type of offense, the type of defense, a player’s fatigue value, any team under-possession penalty and the player’s over-possession penalty. ?

so if Shaq is your opp's highest usage dude and likely to have the highest possession rate he will be more likely to be the guy fouled than not while not being specifically targeted per se

Which is silly because teams usually make a concerted effort to get the ball to their best free throw shooter, not the one who uses up the most possessions.

Shaq shouldn't ever even be in the game at the end with a lead, but of course the sim gives us no way to keep him off the floor in such situations if we start him. (and if we bring him off the bench, we run the risk of not having him ever play in crunch time or having him play excess minutes in blow-outs)