I found that your current findings are correct
The current version has in editdisplay.tpl
Code
{if $user_status == "Administrator" || $user_status == "GlobalModerator"}
I believe on line 308
So a regular moderator will never see the option to elect.
I see this as a bug since all the notation in the language files refer to moderators not just admins and global moderators.
It appears that all is needed is to add
Code
|| $user_status == "Moderator"
To the line

Blue Man Group
There is no such thing as stupid questions. Just stupid answers