After reading some more on NOAUDIT, I think I understand my confusion. NOAUDIT does not necessarily cease auditing for a specific action-user pairing, but cancels a matching AUDIT statement. So NOAUDIT select table BY user1 would only cancel a previously made statement of AUDIT select table BY user1. If the AUIDT statement had never been made and all SELECT TABLE statements are already being audited, the NOAUDIT statement would have no effect.
The relevant documentation:
Use the NOAUDIT statement to stop auditing operations previously enabled by the AUDIT statement.
The NOAUDIT statement must have the same syntax as the previous AUDIT statement. Further, it reverses the effects only of that particular statement. For example, suppose one AUDIT statement A enables auditing for a specific user. A second statement B enables auditing for all users. A NOAUDIT statement C to disable auditing for all users reverses statement B. However, statement C leaves statement A in effect and continues to audit the user that statement A specified.