What's wrong with the script? "dub1" is the name of the entity; the script's purpose is to prevent interaction with the entity and to remove the faction circle.
Added 7 minutes later
Oops, here's the script:
SetObjectEnabled("dub1", nil);
SetDisabledObjectMode("dub1", DISABLED_INTERACT);
sleep(1)
SetMonsterSelectionType("dub1", 0);
Try placing sleep(1) before SetDisabledObjectMode; this might be the issue.